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) -- Nabors Industries (NYSE:NBR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- NBR's debt-to-equity ratio of 0.72 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. Despite the fact that NBR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.95 is high and demonstrates strong liquidity.
- 35.00% is the gross profit margin for NABORS INDUSTRIES LTD which we consider to be strong. Regardless of NBR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.32% trails the industry average.
- NABORS INDUSTRIES LTD's earnings per share declined by 32.6% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NABORS INDUSTRIES LTD reported lower earnings of $0.81 versus $1.17 in the prior year. This year, the market expects an improvement in earnings ($0.98 versus $0.81).
- NBR, with its decline in revenue, underperformed when compared the industry average of 7.5%. Since the same quarter one year prior, revenues fell by 16.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- NBR's share price has surged by 31.85% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
-- Written by a member of TheStreet Ratings Staff
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. Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100% See his top picks for 14-days FREE.
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