Why Basic Energy Services (BAS) Is Surging Today

NEW YORK (TheStreet) -- Basic Energy Services  (BAS) surged to a one-year of $23.39 on Thursday after the company reported fourth-quarter earnings that surpassed analysts' expectations.

Basic Energy Services reported a loss of 18 cents per share, which beat the Capital IQ consensus estimate of a 26-cent loss by eight cents. Revenues also increased 2% year over year to $308 million, which surpassed the consensus estimate of $307.07 million.

For the full year, the company reported a loss of 89 cents per share, down from net income of 48 cents per share one year earlier.

Must Read: Insider Trading Alert - CRS, HBI And BAS Traded By Insiders

TheStreet Ratings team rates BASIC ENERGY SERVICES INC as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate BASIC ENERGY SERVICES INC (BAS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, BAS's share price has jumped by 32.00%, exceeding the performance of the broader market during that same time frame. 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.
  • BAS, with its decline in revenue, underperformed when compared the industry average of 8.2%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 2.53 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, BAS has managed to keep a strong quick ratio of 1.88, which demonstrates the ability to cover short-term cash needs.
  • BASIC ENERGY SERVICES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, BASIC ENERGY SERVICES INC reported lower earnings of $0.46 versus $1.12 in the prior year. For the next year, the market is expecting a contraction of 265.2% in earnings (-$0.76 versus $0.46).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 204.4% when compared to the same quarter one year ago, falling from $6.66 million to -$6.96 million.
  • You can view the full analysis from the report here: BAS Ratings Report

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