Oasis Petroleum Inc Stock Upgraded (OAS)

Editor's Note: 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.

NEW YORK ( TheStreet) -- Oasis Petroleum (NYSE: OAS) 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, good cash flow from operations, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • OAS's very impressive revenue growth greatly exceeded the industry average of 7.1%. Since the same quarter one year prior, revenues leaped by 110.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 193.36% to $110.27 million when compared to the same quarter last year. In addition, OASIS PETROLEUM INC has also vastly surpassed the industry average cash flow growth rate of -15.36%.
  • OASIS PETROLEUM INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, OASIS PETROLEUM INC turned its bottom line around by earning $0.86 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $0.86).
  • The gross profit margin for OASIS PETROLEUM INC is currently very high, coming in at 78.00%. Regardless of OAS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OAS's net profit margin of 9.90% compares favorably to the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
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Oasis Petroleum Inc., an independent exploration and production company, engages in the acquisition and development of oil and natural gas resources in the Montana and North Dakota regions of the Williston Basin. The company has a P/E ratio of 29.7, above the S&P 500 P/E ratio of 17.7. Oasis has a market cap of $2.91 billion and is part of the basic materials sector and energy industry. Shares are up 7% year to date as of the close of trading on Friday.

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

-- Written by a member of TheStreet Ratings Staff

Editor's Note: 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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