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"We rate PHI INC (PHII) 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 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 feeble growth in the company's earnings per share, disappointing return on equity and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 71.48% to $63.43 million when compared to the same quarter last year. In addition, PHI INC has also vastly surpassed the industry average cash flow growth rate of 3.99%.
- PHII's debt-to-equity ratio of 0.91 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.64 is very high and demonstrates very strong liquidity.
- The revenue fell significantly faster than the industry average of 14.6%. Since the same quarter one year prior, revenues fell by 25.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- PHI INC has experienced 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, PHI INC reported lower earnings of $2.08 versus $3.77 in the prior year.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, PHI INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: PHII Ratings Report