NEW YORK ( TheStreet) -- Delek US Holdings (NYSE: DK) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- DK's very impressive revenue growth greatly exceeded the industry average of 40.8%. Since the same quarter one year prior, revenues leaped by 85.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 242.85% and other important driving factors, this stock has surged by 110.87% 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.
- DELEK US HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DELEK US HOLDINGS INC swung to a loss, reporting -$1.46 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus -$1.46).
- The gross profit margin for DELEK US HOLDINGS INC is currently extremely low, coming in at 7.20%. Regardless of DK's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.00% trails the industry average.
- Net operating cash flow has significantly decreased to -$237.20 million or 507.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.