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Range Resources Corporation Stock Hold Recommendation Reiterated (RRC)

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) -- Range Resources Corporation (NYSE: RRC) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

  • 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:

  • The revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 22.8%. 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.
  • Net operating cash flow has increased to $201.25 million or 29.02% when compared to the same quarter last year. In addition, RANGE RESOURCES CORP has also vastly surpassed the industry average cash flow growth rate of -25.50%.
  • RRC's share price has surged by 29.89% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Although RRC had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The debt-to-equity ratio of 1.30 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.25, which clearly demonstrates the inability to cover short-term cash needs.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, RANGE RESOURCES CORP's return on equity significantly trails that of both the industry average and the S&P 500.

Range Resources Corporation operates as an independent natural gas, natural gas liquids (NGLs), and oil company in the United States. It engages in the acquisition, exploration, and development of natural gas and oil properties. Range has a market cap of $12.3 billion and is part of the basic materials sector and energy industry. Shares are up 18.8% year to date as of the close of trading on Monday.

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

--Written by a member of TheStreet Ratings Staff.

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