The firm upgraded their rating based on improvements in the weather and natural gas prospects.
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. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 62.6% when compared to the same quarter one year prior, rising from -$19.80 million to -$7.40 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 2.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BASIC ENERGY SERVICES INC reported significant earnings per share improvement in the most recent quarter compared to 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, BASIC ENERGY SERVICES INC swung to a loss, reporting -$0.89 versus $0.45 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus -$0.89).
- Net operating cash flow has decreased to $58.43 million or 16.65% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Energy Equipment & Services industry and the overall market, BASIC ENERGY SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: BAS Ratings Report