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NEW YORK (TheStreet) -- Gulf Island Fabrication (GIFI) - Get Report has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GULF ISLAND FABRICATION INC (GIFI) 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. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Energy Equipment & Services industry average. The net income increased by 0.7% when compared to the same quarter one year prior, going from $4.28 million to $4.31 million.
- GIFI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GIFI has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
- GULF ISLAND FABRICATION INC reported flat earnings per share in the most recent quarter. 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, GULF ISLAND FABRICATION INC turned its bottom line around by earning $0.50 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings ($0.99 versus $0.50).
- Net operating cash flow has decreased to $20.40 million or 36.54% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- GIFI'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 28.86%, which is also worse than the performance of the S&P 500 Index. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- You can view the full analysis from the report here: GIFI Ratings Report