NEW YORK ( TheStreet) -- Atlas Energy (NYSE: ATLS) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity. Highlights from the ratings report include:
- ATLS's revenue growth has slightly outpaced the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 16.1%. 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.
- Compared to its closing price of one year ago, ATLS's share price has jumped by 57.98%, exceeding the performance of the broader market during that same time frame. Although ATLS had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
- ATLAS ENERGY LP 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ATLAS ENERGY LP turned its bottom line around by earning $1.00 versus -$0.43 in the prior year. This year, the market expects an improvement in earnings ($1.51 versus $1.00).
- The debt-to-equity ratio of 1.33 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, ATLS has a quick ratio of 0.61, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ATLAS ENERGY LP's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff