Oasis Petroleum (OAS) Stock Plunges on Falling Oil Prices
NEW YORK (TheStreet) -- Oasis Petroleum (OAS) - Get Report stock is falling, down 7.87% to $11.59 in early afternoon trading on Wednesday, amid slumping oil prices.
Oil prices are slipping after an American Petroleum Institutereport showed a greater-than-expected increase in U.S. crude stockpiles last week, the Wall Street Journal reports.
Crude oil (WTI) is falling by 2.60% to $43.06 per barrel this morning and Brent crude is lower by 2.87% to $46.08 per barrel, according to the CNBC.com index.
"The huge crude-oil build [reported by the API] weighs on oil prices along with mediocre Chinese economic data this morning...which keeps alive the fear of a growth slowdown in the huge country," Michael Poulsen, oil analyst at Global Risk Management, told the Journal.
Oasis Petroleum is an independent oil and natural gas company that operates in the North Dakota and Montana regions of the Williston Basin.
Separately, TheStreet Ratings team rates OASIS PETROLEUM INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate OASIS PETROLEUM INC (OAS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for OASIS PETROLEUM INC is rather high; currently it is at 64.09%. Regardless of OAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of 13.71% significantly outperformed against the industry.
- OAS, with its decline in revenue, slightly underperformed the industry average of 37.2%. Since the same quarter one year prior, revenues fell by 46.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- OASIS PETROLEUM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OASIS PETROLEUM INC increased its bottom line by earning $5.07 versus $2.44 in the prior year. For the next year, the market is expecting a contraction of 84.6% in earnings ($0.78 versus $5.07).
- The debt-to-equity ratio of 1.03 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, OAS has a quick ratio of 0.51, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: OAS
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.