NEW YORK ( TheStreet) -- Intrepid Potash (NYSE: IPI) 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, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • IPI's revenue growth has slightly outpaced the industry average of 14.8%. Since the same quarter one year prior, revenues rose by 24.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • IPI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.53, which clearly demonstrates the ability to cover short-term cash needs.
  • INTREPID POTASH 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, INTREPID POTASH INC reported lower earnings of $0.61 versus $0.74 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $0.61).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Chemicals industry and the overall market, INTREPID POTASH INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • IPI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.21%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, IPI is still more expensive than most of the other companies in its industry.

Intrepid Potash, Inc., together with its subsidiaries, engages in the production and marketing of muriate of potash or potassium chloride, and langbeinite under the Trio brand name primarily in the United States. The company has a P/E ratio of 17.3, above the average chemicals industry P/E ratio of 16 and below the S&P 500 P/E ratio of 17.7. Intrepid Potash has a market cap of $1.65 billion and is part of the basic materials sector and chemicals industry. Shares are down 37% year to date as of the close of trading on Wednesday.

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