NEW YORK ( TheStreet) -- Alon USA Energy (NYSE: ALJ) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and poor profit margins.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 2.53 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, ALJ has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for ALON USA ENERGY INC is currently extremely low, coming in at 8.10%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.80% trails the industry average.
  • Powered by its strong earnings growth of 122.44% and other important driving factors, this stock has surged by 70.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • ALJ's very impressive revenue growth greatly exceeded the industry average of 23.6%. Since the same quarter one year prior, revenues leaped by 188.9%. Growth in the company's revenue appears to have helped boost the earnings per share.

Alon USA Energy, Inc., together with its subsidiaries, engages in the refining and marketing of petroleum products primarily in the United States. The company operates in three segments: Refining and Unbranded Marketing, Asphalt, and Retail and Branded Marketing. Alon USA Energy has a market cap of $640.2 million and is part of the basic materials sector and energy industry. Shares are up 81.4% year to date as of the close of trading on Tuesday.

You can view the full Alon USA Energy Ratings Report or get investment ideas from our investment research center.
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