Apollo Global Management LLC Stock Downgraded (APO)

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 downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and feeble growth in its earnings per share.

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Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Capital Markets industry. The net income has significantly decreased by 71.0% when compared to the same quarter one year ago, falling from $248.98 million to $72.17 million.
  • Net operating cash flow has significantly decreased to $389.18 million or 56.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • APOLLO GLOBAL MANAGEMENT LLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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 31.7% in earnings ($2.71 versus $3.97).
  • In its most recent trading session, APO has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • APO, with its very weak revenue results, has greatly underperformed against the industry average of 5.2%. Since the same quarter one year prior, revenues plummeted by 62.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Apollo Global Management, LLC is a publicly owned investment manager. It primarily provides its services to endowment and sovereign wealth funds, as well as other institutional and individual investors. The firm manages client focused portfolios. Apollo Global Management has a market cap of $3.68 billion and is part of the financial sector and financial services industry. Shares are down 21.8% year to date as of the close of trading on Wednesday.

You can view the full Apollo Global Management Ratings Report or get investment ideas from our investment research center.

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