NEW YORK (TheStreet) --Shares of Cadiz Inc. (CDZI) - Get Report are gaining 27.83% to $7.90 on Monday following Friday's news the Orange County Superior Court upheld the Santa Margarita Water District and the County of San Bernardino's decision to approve the Cadiz Valley Water Conservation, Recovery and Storage Project.

The renewable resources company said the court ruling denied the six petitions which challenged the project's environmental review.

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TheStreet Ratings team rates CADIZ INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CADIZ INC (CDZI) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Water Utilities industry. The net income has decreased by 3.0% when compared to the same quarter one year ago, dropping from -$5.81 million to -$5.98 million.
  • CADIZ INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, CADIZ INC reported poor results of -$1.46 versus -$1.28 in the prior year.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Net operating cash flow has slightly increased to -$3.14 million or 2.78% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -16.50%.
  • CDZI's very impressive revenue growth greatly exceeded the industry average of 6.4%. Since the same quarter one year prior, revenues leaped by 192.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • You can view the full analysis from the report here: CDZI Ratings Report

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