NEW YORK (TheStreet) -- Shares of SeaWorld Entertainment Inc. (SEAS - Get Report) are up 2.20% to $19.07 in pre-market trading on Monday, following an "outperform" ratings initiation at Credit Suisse (CS - Get Report) .
The firm said it started coverage on the marine mammal theme park based on its belief the stock may bottom near current levels.
"With a 4.5% dividend yield and $250 million share repurchase program, we see good downside support at current levels," Credit Suisse said.
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SeaWorld's stock began to turn around on Friday, following a dramatic sell-off after disappointing second quarter earnings, after the company announced plans to spend several million dollars expanding the habitats of its killer whales.
Separately, TheStreet Ratings team rates SEAWORLD ENTERTAINMENT INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEAWORLD ENTERTAINMENT INC (SEAS) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SEAS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 48.49%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.4%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, SEAWORLD ENTERTAINMENT INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- SEAWORLD ENTERTAINMENT INC 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, SEAWORLD ENTERTAINMENT INC reported lower earnings of $0.57 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $0.57).
- 45.00% is the gross profit margin for SEAWORLD ENTERTAINMENT INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.21% trails the industry average.
- You can view the full analysis from the report here: SEAS Ratings Report