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

)

-- Global Geophysical Services

(NYSE:

GGS

) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and good cash flow from operations. 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.

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Highlights from the ratings report include:

  • The gross profit margin for GLOBAL GEOPHYSICAL SVCS INC is currently very high, coming in at 80.00%. 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 -13.83% is in-line with the industry average.
  • Net operating cash flow has increased to $45.80 million or 17.65% when compared to the same quarter last year. Despite an increase in cash flow, GLOBAL GEOPHYSICAL SVCS INC's cash flow growth rate is still lower than the industry average growth rate of 38.83%.
  • GGS, with its decline in revenue, underperformed when compared the industry average of 7.4%. Since the same quarter one year prior, revenues fell by 13.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 3.43 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, GGS maintains a poor quick ratio of 0.89, which illustrates the inability to avoid short-term cash problems.
  • 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. Compared to other companies in the Energy Equipment & Services industry and the overall market, GLOBAL GEOPHYSICAL SVCS INC's return on equity significantly trails that of both the industry average and the S&P 500.

.

Global Geophysical Services, Inc., together with its subsidiaries, provides an integrated suite of seismic data solutions to the oil and gas industry worldwide. Global Geophysical Services has a market cap of $152.2 million and is part of the basic materials sector and energy industry. Shares are up 4.9% year to date as of the close of trading on Thursday.

You can view the full

Global Geophysical Services Ratings Report

or get investment ideas from our

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-- Written by a member of TheStreet Ratings Staff

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

.

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