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 robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 29.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- NABORS INDUSTRIES LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, NABORS INDUSTRIES LTD increased its bottom line by earning $1.17 versus $0.37 in the prior year. This year, the market expects an improvement in earnings ($1.86 versus $1.17).
- NBR's debt-to-equity ratio of 0.81 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.39 is sturdy.
- The share price of NABORS INDUSTRIES LTD has not done very well: it is down 7.81% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 137.3% when compared to the same quarter one year ago, falling from $193.20 million to -$72.04 million.
Nabors Industries Ltd., together with its subsidiaries, operates as a land drilling contractor worldwide. The company has a P/E ratio of 20.4, below the average energy industry P/E ratio of 154.8 and above the S&P 500 P/E ratio of 17.7. Nabors has a market cap of $4.5 billion and is part of the
industry. Shares are down 10.7% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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