Rating Change #3
EOG Resources (EOG - Get Report) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- EOG's very impressive revenue growth greatly exceeded the industry average of 35.2%. Since the same quarter one year prior, revenues leaped by 76.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for EOG RESOURCES INC is currently very high, coming in at 82.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.20% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 62.20% to $1,272.28 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 30.83%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 862.8% when compared to the same quarter one year prior, rising from -$70.91 million to $540.88 million.
- The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
EOG Resources, Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad and Tobago, the United Kingdom, and the People's Republic of China. The company has a P/E ratio of 25.4, below the average energy industry P/E ratio of 25.6 and above the S&P 500 P/E ratio of 17.7. EOG has a market cap of $26.4 billion and is part of the basic materials sector and energy industry. Shares are up 9.4% year to date as of the close of trading on Friday.You can view the full EOG Ratings Report or get investment ideas from our investment research center.