NEW YORK ( TheStreet) -- Energy Services of America Corporation (AMEX: ESA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 16.8%. Since the same quarter one year prior, revenues rose by 45.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 2160.0% when compared to the same quarter one year prior, rising from -$0.06 million to $1.13 million.
- ENERGY SERVICES OF AMERICA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ENERGY SERVICES OF AMERICA swung to a loss, reporting -$0.44 versus $0.48 in the prior year.
- The gross profit margin for ENERGY SERVICES OF AMERICA is currently extremely low, coming in at 14.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.30% trails that of the industry average.
- Net operating cash flow has decreased to $4.18 million or 28.61% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
-- Written by a member of TheStreet RatingsStaff