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) -- Green Plains Renewable Energy (Nasdaq: GPRE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and attractive valuation levels. 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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- Powered by its strong earnings growth of 1033.33% and other important driving factors, this stock has surged by 143.34% 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 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 1039.1% when compared to the same quarter one year prior, rising from -$1.00 million to $9.41 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 ($0.97 versus $0.27).
- The gross profit margin for GREEN PLAINS RENEWABLE ENRGY is currently extremely low, coming in at 5.41%. Regardless of GPRE'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 1.24% trails the industry average.
- The debt-to-equity ratio of 1.24 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, GPRE has managed to keep a strong quick ratio of 1.55, which demonstrates the ability to cover short-term cash needs.