Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and poor profit margins.
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Highlights from the ratings report include:
- POWR's very impressive revenue growth greatly exceeded the industry average of 3.0%. Since the same quarter one year prior, revenues leaped by 57.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- POWR's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, POWR has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 53.30%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 212.50% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, POWR is still more expensive than most of the other companies in its industry.
- The gross profit margin for POWERSECURE INTL INC is currently lower than what is desirable, coming in at 27.42%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.57% is significantly below that of the industry average.
PowerSecure International, Inc. provides products and services to electric utilities and to their commercial, institutional, and industrial customers in the United States. PowerSecure International has a market cap of $147.4 million and is part of the services sector and diversified services industry. Shares are down 58.1% year to date as of the close of trading on Wednesday.
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