NEW YORK ( TheStreet) -- Bronco Drilling Company Incorporated (Nasdaq: BRNC) has been upgraded by TheStreet Ratings from sell to hold. 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 and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The gross profit margin for BRONCO DRILLING CO is currently lower than what is desirable, coming in at 34.60%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, BRNC's net profit margin of -6.70% significantly underperformed when compared to the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, BRONCO DRILLING CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • BRNC'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 this, the company maintains a quick ratio of 3.05, which clearly demonstrates the ability to cover short-term cash needs.
  • BRNC's very impressive revenue growth greatly exceeded the industry average of 45.5%. Since the same quarter one year prior, revenues leaped by 134.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Bronco Drilling Company, Inc. provides contract land drilling and workover services to the oil and natural gas exploration and production companies in the United States. Bronco has a market cap of $254.5 million and is part of the basic materials sector and energy industry. Shares are up 20.8% year to date as of the close of trading on Friday.

You can view the full Bronco Ratings Report or get investment ideas from our investment research center.
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