World Energy Solutions Inc. Stock Upgraded (XWES)

NEW YORK ( TheStreet) -- World Energy Solutions (Nasdaq: XWES) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 482.3% when compared to the same quarter one year prior, rising from $0.15 million to $0.86 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 25.8%. Since the same quarter one year prior, revenues rose by 20.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for WORLD ENERGY SOLUTIONS INC is currently very high, coming in at 88.50%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, XWES's net profit margin of 15.20% significantly trails the industry average.
  • WORLD ENERGY SOLUTIONS INC 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. During the past fiscal year, WORLD ENERGY SOLUTIONS INC continued to lose money by earning -$0.01 versus -$0.20 in the prior year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Internet Software & Services industry and the overall market, WORLD ENERGY SOLUTIONS INC's return on equity is below that of both the industry average and the S&P 500.

World Energy Solutions, Inc., an energy management services company, develops and builds solutions to assist businesses, institutions, and governments in managing their energy as a strategic asset. It operates online exchanges for energy and environmental commodities. The company has a P/E ratio of 26.4, above the average diversified services industry P/E ratio of 23 and above the S&P 500 P/E ratio of 17.7. World Energy has a market cap of $42.4 million and is part of the services sector and diversified services industry. Shares are up 40.7% year to date as of the close of trading on Wednesday.

You can view the full World Energy Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet RatingsStaff