Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Gran Tierra Energy (AMEX: GTE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 11.8%. 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.
- GTE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GTE has a quick ratio of 2.04, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for GRAN TIERRA ENERGY INC is currently very high, coming in at 78.50%. Regardless of GTE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GTE's net profit margin of 26.50% significantly outperformed against the industry.
- GRAN TIERRA ENERGY INC's earnings per share declined by 5.9% 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, GRAN TIERRA ENERGY INC increased its bottom line by earning $0.44 versus $0.14 in the prior year.
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 9.1% when compared to the same quarter one year ago, dropping from $49.09 million to $44.61 million.
-- Written by a member of TheStreet Ratings Staff