Tidewater Inc. Stock Upgraded (TDW)
NEW YORK (
)
-- Tidewater
(NYSE:
) has been upgraded by TheStreet Ratings from hold to buy. 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, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- TDW's revenue growth trails the industry average of 15.6%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TDW has a quick ratio of 2.30, which demonstrates the ability of the company to cover short-term liquidity needs.
- 42.00% is the gross profit margin for TIDEWATER INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.50% is above that of the industry average.
- Net operating cash flow has slightly increased to $70.52 million or 9.00% when compared to the same quarter last year. In addition, TIDEWATER INC has also vastly surpassed the industry average cash flow growth rate of -82.60%.
- After a year of stock price fluctuations, the net result is that TDW's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
Tidewater Inc., through its subsidiaries, provides offshore service vessels and marine support services to the offshore energy industry through the operation of a fleet of marine service vessels. The company has a P/E ratio of 42.7, above the average transportation industry P/E ratio of 42.5 and above the S&P 500 P/E ratio of 17.7. Tidewater has a market cap of $2.85 billion and is part of the
sector and
industry. Shares are up 17.3% year to date as of the close of trading on Friday.
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