Rating Change #2
Noble Corporation (NE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 37.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 120.5% when compared to the same quarter one year prior, rising from $54.50 million to $120.18 million.
- Net operating cash flow has increased to $103.71 million or 19.51% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.79%.
- Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.53 is high and demonstrates strong liquidity.
- NOBLE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NOBLE CORP reported lower earnings of $1.45 versus $3.01 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $1.45).
Noble Corporation operates as an offshore drilling contractor for the oil and gas industry. The company offers contract drilling services for oil and gas wells. The company has a P/E ratio of 20, below the average energy industry P/E ratio of 20.1 and above the S&P 500 P/E ratio of 17.7. Noble has a market cap of $8.68 billion and is part of the basic materials sector and energy industry. Shares are up 13.8% year to date as of the close of trading on Tuesday.You can view the full Noble Ratings Report or get investment ideas from our investment research center.
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