NEW YORK ( TheStreet) -- Hornbeck Offshore Services (NYSE: HOS) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • HOS's very impressive revenue growth greatly exceeded the industry average of 12.9%. Since the same quarter one year prior, revenues leaped by 62.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 271.0% when compared to the same quarter one year prior, rising from -$7.03 million to $12.01 million.
  • Net operating cash flow has significantly increased by 663.50% to $33.41 million when compared to the same quarter last year. In addition, HORNBECK OFFSHORE SVCS INC has also vastly surpassed the industry average cash flow growth rate of -47.18%.
  • 46.40% is the gross profit margin for HORNBECK OFFSHORE SVCS INC which we consider to be strong. 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 9.10% trails the industry average.
  • Powered by its strong earnings growth of 226.92% and other important driving factors, this stock has surged by 33.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

Hornbeck Offshore Services, Inc., through its subsidiaries, provides marine transportation services to exploration and production, oilfield service, offshore construction, and the United States military customers. The company operates in two segments, Upstream and Downstream. The company has a P/E ratio of 96.8, equal to the average energy industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Hornbeck Offshore Services has a market cap of $1.47 billion and is part of the basic materials sector and energy industry. Shares are up 34.2% year to date as of the close of trading on Friday.

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

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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