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) -- Advanced Emissions Solutions (Nasdaq: ADES) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and poor profit margins.
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- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 126.8% when compared to the same quarter one year ago, falling from $20.13 million to -$5.41 million.
- The gross profit margin for ADA-ES INC is currently extremely low, coming in at 6.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -8.01% is significantly below that of the industry average.
- In its most recent trading session, ADES has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- ADA-ES INC 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, ADA-ES INC continued to lose money by earning -$1.30 versus -$3.06 in the prior year. This year, the market expects an improvement in earnings ($3.48 versus -$1.30).
- ADES's very impressive revenue growth greatly exceeded the industry average of 4.2%. Since the same quarter one year prior, revenues leaped by 174.2%. 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.
-- Written by a member of TheStreet Ratings Staff