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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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Highlights from the ratings report include:
- NXY's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 3.7%. 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 78.81% to $515.00 million when compared to the same quarter last year. In addition, NEXEN INC has also vastly surpassed the industry average cash flow growth rate of -18.49%.
- Compared to its closing price of one year ago, NXY's share price has jumped by 33.20%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- NEXEN INC 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, NEXEN INC reported lower earnings of $0.66 versus $1.09 in the prior year.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 70.5% when compared to the same quarter one year ago, falling from $200.00 million to $59.00 million.
Nexen Inc. operates as an independent energy company worldwide. The company's Conventional Oil and Gas segment explores for, develops, and produces crude oil and natural gas from conventional sources. Nexen has a market cap of $12.92 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 33.9, above the S&P 500 P/E ratio of 17.7. Shares are up 53.2% 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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