NEW YORK ( TheStreet) -- Helix Energy Solutions Group Inc (NYSE: HLX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook. Highlights from the ratings report include:
- 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 75.9% when compared to the same quarter one year prior, rising from $26.17 million to $46.03 million.
- The gross profit margin for HELIX ENERGY SOLUTIONS GROUP is rather high; currently it is at 54.50%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.40% trails the industry average.
- Net operating cash flow has slightly increased to $100.56 million or 1.22% when compared to the same quarter last year. Despite an increase in cash flow of 1.22%, HELIX ENERGY SOLUTIONS GROUP is still growing at a significantly lower rate than the industry average of 64.68%.
- HLX's debt-to-equity ratio of 0.82 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that HLX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.98 is high and demonstrates strong liquidity.
- Powered by its strong earnings growth of 72.00% and other important driving factors, this stock has surged by 27.86% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.