Noble Corporation Stock Buy Recommendation Reiterated (NE)

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) -- Noble Corporation (NYSE: NE) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 28.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Energy Equipment & Services industry average. The net income increased by 0.5% when compared to the same quarter one year prior, going from $127.00 million to $127.58 million.
  • Net operating cash flow has significantly increased by 58.21% to $450.19 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.82%.
  • NOBLE CORP reported flat earnings per share in the most recent quarter. 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, NOBLE CORP increased its bottom line by earning $2.05 versus $1.45 in the prior year. This year, the market expects an improvement in earnings ($3.28 versus $2.05).
  • 46.60% is the gross profit margin for NOBLE CORP which we consider to be strong. Regardless of NE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NE's net profit margin of 13.20% compares favorably to the industry average.

Noble Corporation operates as an offshore drilling contractor for the oil and gas industry. The company offers contract drilling services for oil and gas wells. Noble has a market cap of $9.88 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 19.1, above the S&P 500 P/E ratio of 17.7. Shares are up 12.3% year to date as of the close of trading on Wednesday.

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

--Written by a member of TheStreet Ratings Staff.

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