NEW YORK (TheStreet) -- Shares of Oasis Petroleum Inc. (OAS) - Get Report are lower by 0.50% to $13.99 in early afternoon trading on Monday, as declining oil prices drive some energy and related stocks into the red today.
Oil prices are slumping today as officials from Iran and six world powers meet in Lausanne, Switzerland to discuss the possibility of a deal relating to Tehran's nuclear program, Reuters reports.
Crude oil (WTI) is down by 0.96% to $48.40 per barrel and Brent crude is declining by 1.51% to $55.56 per barrel this afternoon, according to the CNBC.com index.
The talks regarding the nuclear program could put an end to Western sanctions and result in an increase in Iranian oil exports.
The parties have until the end of the day Tuesday to work out an agreement, Reuters added.
Also pressuring oil is a strong dollar. Barclays predicts that the currency will rise above parity with the euro by the fourth quarter of 2015, Reuters noted.
Separately, TheStreet Ratings team rates OASIS PETROLEUM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate OASIS PETROLEUM INC (OAS) 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 compelling growth in net income, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 223.9% when compared to the same quarter one year prior, rising from $54.49 million to $176.50 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, OASIS PETROLEUM INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.9%. Since the same quarter one year prior, revenues fell by 10.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- OAS'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 64.67%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The debt-to-equity ratio of 1.44 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.44, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: OAS Ratings Report