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"We rate QEP RESOURCES INC (QEP) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, QEP RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.76%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 457.44% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- QEP RESOURCES 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 reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, QEP RESOURCES INC swung to a loss, reporting -$2.29 versus $0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.47 versus -$2.29).
- 44.45% is the gross profit margin for QEP RESOURCES INC which we consider to be strong. Regardless of QEP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QEP's net profit margin of 83.27% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 51.69% to $322.80 million when compared to the same quarter last year. In addition, QEP RESOURCES INC has also vastly surpassed the industry average cash flow growth rate of -13.29%.
- You can view the full analysis from the report here: QEP Ratings Report