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) -- EnerNOC (Nasdaq: ENOC) 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, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.
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- Powered by its strong earnings growth of 26.04% and other important driving factors, this stock has surged by 27.54% 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.
- ENOC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, ENOC has a quick ratio of 2.01, which demonstrates the ability of the company to cover short-term liquidity needs.
- 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. When compared to other companies in the Commercial Services & Supplies industry and the overall market, ENERNOC INC's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- ENERNOC INC has improved earnings per share by 26.0% 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ENERNOC INC turned its bottom line around by earning $0.64 versus -$0.91 in the prior year. For the next year, the market is expecting a contraction of 25.0% in earnings ($0.48 versus $0.64).
- 44.00% is the gross profit margin for ENERNOC INC which we consider to be strong. Regardless of ENOC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ENOC's net profit margin of -55.24% significantly underperformed when compared to the industry average.