NEW YORK (
) 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, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and generally poor debt management.
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Highlights from the ratings report include:
- CHK's very impressive revenue growth greatly exceeded the industry average of 11.9%. Since the same quarter one year prior, revenues leaped by 50.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 82.7% when compared to the same quarter one year prior, rising from -$162.00 million to -$28.00 million.
- The gross profit margin for CHESAPEAKE ENERGY CORP is currently lower than what is desirable, coming in at 30.20%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, CHK's net profit margin of -1.20% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to $274.00 million or 63.02% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Chesapeake Energy Corporation engages in the acquisition, exploration, development, and production of natural gas and oil properties in the United States. The company also offers marketing, midstream, drilling, and other oilfield services. The company has a P/E ratio of 7.5, below the average energy industry P/E ratio of 7.8and below the S&P 500 P/E ratio of 17.7. Chesapeake Energy has a market cap of $12.61 billion and is part of the
industry. Shares are down 18.7% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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.