NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- GIFI's very impressive revenue growth greatly exceeded the industry average of 15.7%. Since the same quarter one year prior, revenues leaped by 105.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- GULF ISLAND FABRICATION INC reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, GULF ISLAND FABRICATION INC swung to a loss, reporting -$0.13 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($2.32 versus -$0.13).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry average. The net income increased by 4.3% when compared to the same quarter one year prior, going from $1.69 million to $1.77 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, GULF ISLAND FABRICATION INC's return on equity significantly trails that of both the industry average and the S&P 500.
Gulf Island Fabrication, Inc., through its subsidiaries, operates as a fabricator of offshore drilling and production platforms, hull and deck sections of floating production platforms, and other specialized structures used in the development and production of offshore oil and gas reserves. Gulf Island Fabrication has a market cap of $445.5 million and is part of the
industry. Shares are up 18.2% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff