NEW YORK ( TheStreet) -- Eagle Rock Energy Partners (Nasdaq: EROC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated. Highlights from the ratings report include:
- EROC's very impressive revenue growth greatly exceeded the industry average of 35.5%. Since the same quarter one year prior, revenues leaped by 136.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- EAGLE ROCK ENERGY PARTNRS LP reported significant earnings per share improvement 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 year. We feel that this trend should continue. During the past fiscal year, EAGLE ROCK ENERGY PARTNRS LP continued to lose money by earning -$0.53 versus -$2.43 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus -$0.53).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 485.8% when compared to the same quarter one year prior, rising from -$25.24 million to $97.37 million.
- 43.80% is the gross profit margin for EAGLE ROCK ENERGY PARTNRS LP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 25.90% significantly outperformed against the industry average.
- Powered by its strong earnings growth of 362.50% and other important driving factors, this stock has surged by 45.37% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.