NEW YORK ( TheStreet) -- PAA Natural Gas Storage L.P (NYSE: PNG) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins. Highlights from the ratings report include:
- PNG's very impressive revenue growth greatly exceeded the industry average of 35.2%. Since the same quarter one year prior, revenues leaped by 216.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- PAA NATURAL GAS STORAGE LP has improved earnings per share by 23.5% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.89 versus $0.52).
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.25 is very weak and demonstrates a lack of ability to pay short-term obligations.
- The gross profit margin for PAA NATURAL GAS STORAGE LP is currently lower than what is desirable, coming in at 33.20%. It has decreased significantly from the same period last year. Despite the weak results of the gross profit margin, the net profit margin of 19.50% has significantly outperformed against the industry average.
- PNG has underperformed the S&P 500 Index, declining 24.84% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.