NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, attractive valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 15.7%. Since the same quarter one year prior, revenues rose by 42.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- TESO's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 895.7% when compared to the same quarter one year prior, rising from $1.16 million to $11.50 million.
- TESCO CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, TESCO CORP increased its bottom line by earning $0.69 versus $0.19 in the prior year. For the next year, the market is expecting a contraction of 11.6% in earnings ($0.61 versus $0.69).
Tesco Corporation engages in the design, manufacture, and service delivery of technology based solutions for the upstream energy industry worldwide. It operates in three segments: Top Drive, Tubular Services, and CASING DRILLING. The company has a P/E ratio of 26.2, below the average energy industry P/E ratio of 31.1 and above the S&P 500 P/E ratio of 17.7. Tesco has a market cap of $535.2 million and is part of the
industry. Shares are up 24.7% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet RatingsStaff