NEW YORK (
-- Provident Energy
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and generally poor debt management.
Highlights from the ratings report include:
- Net operating cash flow has declined marginally to $76.50 million or 5.27% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The gross profit margin for PROVIDENT ENERGY LTD is rather low; currently it is at 19.40%. Regardless of PVX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PVX's net profit margin of -2.30% significantly underperformed when compared to the industry average.
- PROVIDENT ENERGY LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PROVIDENT ENERGY LTD increased its bottom line by earning $0.38 versus $0.02 in the prior year.
- PVX's revenue growth trails the industry average of 24.1%. Since the same quarter one year prior, revenues slightly increased by 9.8%. 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.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 80.2% when compared to the same quarter one year prior, rising from -$60.46 million to -$11.99 million.
Provident Energy Ltd. owns and manages a natural gas liquids midstream services and marketing business. The company involves in the processing, extraction, transportation, loading, storage, and marketing of natural gas liquids in central Canada and the eastern United States. The company has a P/E ratio of 24.8, above the average energy industry P/E ratio of 24.6 and above the S&P 500 P/E ratio of 17.7. Provident Energy has a market cap of $2.5 billion and is part of the
industry. Shares are up 12.1% year to date as of the close of trading on Friday.
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