NEW YORK (TheStreet) -- Orbital Sciences (ORB) shares are down 16.5% to $25.36 in trading on Wednesday after the rocket manufacturer's unmanned Antares rocket exploded seconds after liftoff in Virginia yesterday.
The rocket was carrying NASA supplies destined for the International Space Station before it exploded into a fireball about six seconds after its launch from Wallops Island, Virginia on Tuesday.
Analysts at RBC Capital believe that the company's AJ-26 main engine is the likely cause of the $200 million rocket's failure.
"We will conduct a thorough investigation immediately to determine the cause of this failure and what steps can be taken to avoid a repeat of this incident," said Orbital general manager Frank Culbertson.
TheStreet Ratings team rates ORBITAL SCIENCES CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ORBITAL SCIENCES CORP (ORB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ORB's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ORB's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.95, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 36.3% when compared to the same quarter one year prior, rising from $15.55 million to $21.20 million.
- Net operating cash flow has significantly increased by 79.66% to $70.50 million when compared to the same quarter last year. In addition, ORBITAL SCIENCES CORP has also vastly surpassed the industry average cash flow growth rate of -13.47%.
- 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. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: ORB Ratings Report