Apollo Global Management (APO) Lower After Downgrade

NEW YORK (TheStreet) -- Investment management firm Apollo Global Management  (APO) is tracing lower in pre-market trading after receiving a downgrade from Oppenheimer

Oppenheimer downgraded the stock to "perform" from "outperform" on a valuation call. 

Before the bell, shares have taken off 0.64% to $35.99.

TheStreet Ratings team rates APOLLO GLOBAL MANAGEMENT LLC as a Sell with a ratings score of D-. The team has this to say about their recommendation:

"We rate APOLLO GLOBAL MANAGEMENT LLC (APO) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly decreased to -$889.30 million or 271.04% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, APOLLO GLOBAL MANAGEMENT LLC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 48.75% is the gross profit margin for APOLLO GLOBAL MANAGEMENT LLC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 17.00% is above that of the industry average.
  • This stock has increased by 85.33% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in APO do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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