NEW YORK ( TheStreet) -- Inergy (NYSE: NRGY) 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 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 38.7%. Since the same quarter one year prior, revenues rose by 33.3%. 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.
  • Net operating cash flow has significantly increased by 2075.00% to $8.70 million when compared to the same quarter last year. In addition, INERGY LP has also vastly surpassed the industry average cash flow growth rate of 38.53%.
  • INERGY LP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, INERGY LP swung to a loss, reporting -$0.23 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus -$0.23).
  • The gross profit margin for INERGY LP is currently lower than what is desirable, coming in at 30.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.10% is significantly below that of the industry average.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 386.3% when compared to the same quarter one year ago, falling from $12.40 million to -$35.50 million.

Inergy, L.P. engages in the retail marketing, sale, and distribution of propane to residential, commercial, industrial, and agricultural customers in the United States. Inergy has a market cap of $3.3 billion and is part of the utilities sector and utilities industry. Shares are down 29.9% year to date as of the close of trading on Monday.

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