NEW YORK ( TheStreet) -- Green Plains Renewable Energy (Nasdaq: GPRE) 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, attractive valuation levels, increase in net income and growth in earnings per share. 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:
- GPRE's very impressive revenue growth greatly exceeded the industry average of 34.6%. Since the same quarter one year prior, revenues leaped by 92.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 68.7% when compared to the same quarter one year prior, rising from $7.37 million to $12.43 million.
- GREEN PLAINS RENEWABLE ENRGY has improved earnings per share by 39.1% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, GREEN PLAINS RENEWABLE ENRGY increased its bottom line by earning $1.52 versus $0.78 in the prior year. For the next year, the market is expecting a contraction of 32.2% in earnings ($1.03 versus $1.52).
- GPRE has underperformed the S&P 500 Index, declining 12.79% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.