Will This Upgrade Help Hornbeck Offshore Services (HOS) Stock Today?

NEW YORK (TheStreet) -- Hornbeck Offshore Services (HOS) was upgraded to "buy" from "hold" at Wunderlich Securities on Monday.

The firm raised its price target on the marine transportation services company to $55 from $47.

Wunderlich said the ratings upgrade was due to its expectations the offshore support vessel market will improve as new rig deliveries drive demand in the Gulf of Mexico.

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TheStreet Ratings team rates HORNBECK OFFSHORE SVCS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HORNBECK OFFSHORE SVCS INC (HOS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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

  • The revenue growth came in higher than the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 22.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HORNBECK OFFSHORE SVCS 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. During the past fiscal year, HORNBECK OFFSHORE SVCS INC increased its bottom line by earning $1.76 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($3.23 versus $1.76).
  • 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 96.9% when compared to the same quarter one year prior, rising from $11.30 million to $22.24 million.
  • 49.32% is the gross profit margin for HORNBECK OFFSHORE SVCS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.34% is above that of the industry average.
  • Net operating cash flow has slightly increased to $38.50 million or 8.23% when compared to the same quarter last year. Despite an increase in cash flow, HORNBECK OFFSHORE SVCS INC's cash flow growth rate is still lower than the industry average growth rate of 49.45%.
  • You can view the full analysis from the report here: HOS Ratings Report
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