NEW YORK ( TheStreet) -- Dawson Geophysical Company (Nasdaq: DWSN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- DAWSON GEOPHYSICAL CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DAWSON GEOPHYSICAL CO continued to lose money by earning -$0.42 versus -$1.20 in the prior year. This year, the market expects an improvement in earnings ($2.09 versus -$0.42).
- 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 215.1% when compared to the same quarter one year prior, rising from -$4.86 million to $5.59 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.1%. Since the same quarter one year prior, revenues slightly increased by 9.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DWSN's debt-to-equity ratio is very low at 0.07 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 2.95, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Energy Equipment & Services industry and the overall market, DAWSON GEOPHYSICAL CO's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet RatingsStaff