NEW YORK ( TheStreet) -- Navios Maritime Acquisition (NYSE: NNA) 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 generally poor debt management. Highlights from the ratings report include:
- NNA's very impressive revenue growth greatly exceeded the industry average of 25.0%. Since the same quarter one year prior, revenues leaped by 55.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NAVIOS MARITIME ACQUISITION 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NAVIOS MARITIME ACQUISITION continued to lose money by earning -$0.09 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings ($0.10 versus -$0.09).
- The gross profit margin for NAVIOS MARITIME ACQUISITION is currently very high, coming in at 94.10%. Regardless of NNA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.30% trails the industry average.
- NNA has underperformed the S&P 500 Index, declining 15.56% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The debt-to-equity ratio is very high at 3.71 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, NNA's quick ratio is somewhat strong at 1.01, demonstrating the ability to handle short-term liquidity needs.
-- Written by a member of TheStreet RatingsStaff