NEW YORK ( TheStreet) -- PrimeEnergy (Nasdaq: PNRG) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and weak operating cash flow. Highlights from the ratings report include:
- PNRG's very impressive revenue growth greatly exceeded the industry average of 36.1%. Since the same quarter one year prior, revenues leaped by 91.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Net operating cash flow has decreased to $11.69 million or 21.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 2.50 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, PNRG has a quick ratio of 0.70, this demonstrates the lack of ability of the company to cover short-term liquidity needs.