Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Casella Waste Systems (Nasdaq: CWST) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth 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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- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 34.56% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- The gross profit margin for CASELLA WASTE SYS INC is currently lower than what is desirable, coming in at 34.08%. Regardless of CWST's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.14% trails the industry average.
- The debt-to-equity ratio is very high at 42.82 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CWST has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.