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) -- Apollo Global Management (NYSE: APO) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.
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- 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.
- APO, with its decline in revenue, underperformed when compared the industry average of 7.7%. Since the same quarter one year prior, revenues fell by 31.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- APOLLO GLOBAL MANAGEMENT LLC's earnings per share declined by 17.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, APOLLO GLOBAL MANAGEMENT LLC increased its bottom line by earning $3.97 versus $1.95 in the prior year. For the next year, the market is expecting a contraction of 22.9% in earnings ($3.06 versus $3.97).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has decreased by 7.2% when compared to the same quarter one year ago, dropping from $171.51 million to $159.16 million.