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Teekay Corporation Stock Downgraded (TK)

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) -- Teekay Corporation (NYSE: TK) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

  • 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:

  • TK's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 0.5%. 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 where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 293.8% when compared to the same quarter one year ago, falling from $48.35 million to -$93.71 million.
  • Net operating cash flow has significantly decreased to $27.02 million or 54.08% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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Teekay Corporation engages in the marine transportation of crude oil and gas in Bermuda and internationally. Teekay has a market cap of $2.37 billion and is part of the services sector and transportation industry. Shares are up 5.7% year to date as of the close of trading on Thursday.

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

-- Written by a member of TheStreet Ratings Staff

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