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Noble Corporation Stock Buy Recommendation Reiterated (NE)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Noble Corporation (NYSE:NE) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . 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 increase in stock price during the past year. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 13.3%. Since the same quarter one year prior, revenues rose by 43.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 47.40% is the gross profit margin for NOBLE CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.80% is above that of the industry average.
  • Net operating cash flow has significantly increased by 172.59% to $432.24 million when compared to the same quarter last year. In addition, NOBLE CORP has also vastly surpassed the industry average cash flow growth rate of -51.07%.
  • 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 195.5% when compared to the same quarter one year prior, rising from $54.08 million to $159.82 million.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

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 16.5, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Noble has a market cap of $8.87 billion and is part of the basic materials sector and energy industry. Shares are up 19.6% 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.

--Written by a member of TheStreet Ratings Staff.

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