NEW YORK ( TheStreet) -- Callon Petroleum (NYSE: CPE) has been upgraded by TheStreet Ratings from sell 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, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- CPE's revenue growth has slightly outpaced the industry average of 23.1%. Since the same quarter one year prior, revenues rose by 30.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, CPE has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for CALLON PETROLEUM CO/DE is currently very high, coming in at 87.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 225.40% significantly outperformed against the industry average.
- Net operating cash flow has increased to $21.40 million or 18.78% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.75%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 9709.0% when compared to the same quarter one year prior, rising from $0.73 million to $71.70 million.
-- Written by a member of TheStreet RatingsStaff