NEW YORK ( TheStreet) -- Pilgrims Pride (NYSE: PPC) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity. Highlights from the ratings report include:
- PPC's revenue growth trails the industry average of 25.4%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- PILGRIM'S PRIDE CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PILGRIM'S PRIDE CORP swung to a loss, reporting -$2.32 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus -$2.32).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 32.27%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 300.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food Products industry and the overall market, PILGRIM'S PRIDE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for PILGRIM'S PRIDE CORP is currently extremely low, coming in at 1.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.70% is significantly below that of the industry average.
-- Written by a member of TheStreet RatingsStaff