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 (
) 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 revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, generally higher debt management risk and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- CHK's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 2.1%. 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 91.0% when compared to the same quarter one year prior, rising from $509.00 million to $972.00 million.
- CHK's debt-to-equity ratio of 0.83 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 CHK's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.54 is low and demonstrates weak liquidity.
- Net operating cash flow has decreased to $748.00 million or 44.67% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly 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. Chesapeake Energy has a market cap of $13.37 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 6.4, below the S&P 500 P/E ratio of 17.7. Shares are down 9.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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