NEW YORK ( TheStreet) -- EnergySolutions (NYSE: ES) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- 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 Commercial Services & Supplies industry. The net income has significantly decreased by 258.3% when compared to the same quarter one year ago, falling from $12.86 million to -$20.35 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Commercial Services & Supplies industry and the overall market, ENERGYSOLUTIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ENERGYSOLUTIONS INC 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 reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ENERGYSOLUTIONS INC increased its bottom line by earning $0.57 versus $0.51 in the prior year. For the next year, the market is expecting a contraction of 45.6% in earnings ($0.31 versus $0.57).
- Net operating cash flow has significantly increased by 233.11% to $104.33 million when compared to the same quarter last year. In addition, ENERGYSOLUTIONS INC has also vastly surpassed the industry average cash flow growth rate of -3.43%.
- The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 14.9%. 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.