NEW YORK ( TheStreet) -- Hornbeck Offshore Services (NYSE: HOS) 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, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 15.5%. Since the same quarter one year prior, revenues rose by 26.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 350.00% and other important driving factors, this stock has surged by 43.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- HORNBECK OFFSHORE SVCS INC reported significant earnings per share improvement in the most recent quarter compared to 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, HORNBECK OFFSHORE SVCS INC swung to a loss, reporting -$0.18 versus $1.34 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus -$0.18).
- HOS's debt-to-equity ratio of 0.72 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 6.57 is very high and demonstrates very strong liquidity.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, HORNBECK OFFSHORE SVCS INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff