NEW YORK ( TheStreet) -- SunEdison (NYSE: SUNE) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.
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- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 344.54% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- SUNEDISON INC has improved earnings per share by 7.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SUNEDISON INC continued to lose money by earning -$0.69 versus -$6.66 in the prior year. This year, the market expects an improvement in earnings ($0.14 versus -$0.69).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 15.9%. Since the same quarter one year prior, revenues fell by 14.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for SUNEDISON INC is rather low; currently it is at 24.91%. Regardless of SUNE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SUNE's net profit margin of -20.15% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio is very high at 5.31 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, SUNE has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.