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, good cash flow from operations 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 and disappointing return on equity.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.6%. Since the same quarter one year prior, revenues slightly increased by 9.8%. 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.
- Net operating cash flow has significantly increased by 60.20% to $382.86 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.34%.
- NBR's debt-to-equity ratio of 0.79 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 NBR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.89 is high and demonstrates strong liquidity.
- The share price of NABORS INDUSTRIES LTD has not done very well: it is down 23.75% 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, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, NABORS INDUSTRIES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
Nabors Industries Ltd., together with its subsidiaries, operates as a land drilling contractor worldwide. Nabors has a market cap of $3.97 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 19.8, above the S&P 500 P/E ratio of 17.7. Shares are down 21.1% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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