NEW YORK ( TheStreet) -- Contango Oil & Gas Company (AMEX: MCF) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and revenue growth. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive. Highlights from the ratings report include:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- CONTANGO OIL & GAS CO has improved earnings per share by 12.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, CONTANGO OIL & GAS CO increased its bottom line by earning $4.04 versus $3.10 in the prior year.
- The revenue growth significantly trails the industry average of 38.6%. Since the same quarter one year prior, revenues slightly increased by 5.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for CONTANGO OIL & GAS CO is currently very high, coming in at 80.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 41.60% significantly outperformed against the industry average.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 14.1% when compared to the same quarter one year prior, going from $15.37 million to $17.53 million.