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) -- Warren Resources (Nasdaq: WRES) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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- WRES's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues slightly increased by 2.2%. 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.
- Compared to its closing price of one year ago, WRES's share price has jumped by 107.08%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WRES should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for WARREN RESOURCES INC is currently very high, coming in at 70.23%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.38% is above that of the industry average.
- Net operating cash flow has increased to $21.25 million or 49.61% when compared to the same quarter last year. In addition, WARREN RESOURCES INC has also vastly surpassed the industry average cash flow growth rate of -22.92%.
- The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.75 is somewhat weak and could be cause for future problems.