Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Cal Dive International (NYSE: DVR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- Powered by its strong earnings growth of 66.66% and other important driving factors, this stock has surged by 26.19% 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.
- CAL DIVE INTERNATIONAL INC 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CAL DIVE INTERNATIONAL INC continued to lose money by earning -$0.70 versus -$0.72 in the prior year. This year, the market expects an improvement in earnings (-$0.17 versus -$0.70).
- DVR's debt-to-equity ratio of 0.70 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.20 is sturdy.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, CAL DIVE INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CAL DIVE INTERNATIONAL INC is currently extremely low, coming in at 13.44%. Regardless of DVR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DVR's net profit margin of -1.37% significantly underperformed when compared to the industry average.