NGL Energy Partners LP Stock Downgraded (NGL)

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) -- NGL Energy Partners (NYSE: NGL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • NGL's very impressive revenue growth greatly exceeded the industry average of 2.5%. Since the same quarter one year prior, revenues leaped by 163.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, NGL's share price has jumped by 42.60%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • NGL's debt-to-equity ratio of 0.82 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.91 is weak.
  • The gross profit margin for NGL ENERGY PARTNERS LP is currently extremely low, coming in at 3.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.09% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $9.21 million or 64.50% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

If you liked this article you might like

NGL Energy Partners Hit With Quant Downgrade, Weak Charts

NGL Energy Partners Hit With Quant Downgrade, Weak Charts

3 Perfect Pipeline Plays for 2017

3 Pipeline Stocks That Could Prosper Under the Trump Administration

Analysts' Actions -- Panera, Target, Tesla, U.S. Steel and More