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) -- Tutor Perini (NYSE: TPC) 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, growth in earnings per share and attractive valuation levels. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 78.59% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
- TUTOR PERINI CORP has improved earnings per share by 6.5% 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TUTOR PERINI CORP turned its bottom line around by earning $1.80 versus -$5.64 in the prior year. This year, the market expects an improvement in earnings ($2.34 versus $1.80).
- Net operating cash flow has significantly increased by 51.29% to -$41.13 million when compared to the same quarter last year. Despite an increase in cash flow of 51.29%, TUTOR PERINI CORP is still growing at a significantly lower rate than the industry average of 139.56%.
- 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 Construction & Engineering industry and the overall market, TUTOR PERINI CORP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for TUTOR PERINI CORP is currently extremely low, coming in at 12.56%. Regardless of TPC'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 1.66% trails the industry average.