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) -- Green Plains Renewable Energy (Nasdaq: GPRE) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 148.9% when compared to the same quarter one year prior, rising from $13.27 million to $33.02 million.
- GREEN PLAINS RENEWABLE ENRGY reported significant earnings per share improvement in the most recent quarter compared to 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, GREEN PLAINS RENEWABLE ENRGY reported lower earnings of $0.27 versus $1.02 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus $0.27).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.6%. Since the same quarter one year prior, revenues slightly dropped by 4.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for GREEN PLAINS RENEWABLE ENRGY is currently extremely low, coming in at 4.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.73% trails that of the industry average.
- GPRE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 29.36%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
-- Written by a member of TheStreet Ratings Staff