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NEW YORK (TheStreet) -- Vermilion Energy (VET) - Get Report has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate VERMILION ENERGY INC (VET) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $229.15 million or 29.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.79%.
- The gross profit margin for VERMILION ENERGY INC is rather high; currently it is at 68.67%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, VET's net profit margin of 20.93% significantly outperformed against the industry.
- The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
- VERMILION ENERGY INC's earnings per share declined by 45.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, VERMILION ENERGY INC reported lower earnings of $2.52 versus $3.19 in the prior year.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, VERMILION ENERGY INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: VET Ratings Report