NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- EGY's revenue growth trails the industry average of 36.3%. Since the same quarter one year prior, revenues rose by 14.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- EGY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.17, which clearly demonstrates the ability to cover short-term cash needs.
- VAALCO ENERGY INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VAALCO ENERGY INC turned its bottom line around by earning $0.66 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($0.79 versus $0.66).
- Net operating cash flow has decreased to $13.28 million or 33.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 80.7% when compared to the same quarter one year ago, falling from $12.45 million to $2.40 million.
VAALCO Energy, Inc., together with its subsidiaries, engages in the acquisition, exploration, development, and production of crude oil and natural gas. The company has a P/E ratio of 8.7, below the average energy industry P/E ratio of 9.5 and below the S&P 500 P/E ratio of 17.7. VAALCO Energy has a market cap of $313.6 million and is part of the
industry. Shares are down 28.4% year to date as of the close of trading on Monday.
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