NEW YORK (TheStreet) -- Kodiak Oil & Gas (KOG) shares are down -4.6% to $11.90 in pre-market trading on Friday after being downgraded by analysts at Wunderlich Securities.
The firm downgraded the independent energy company to "hold" from "buy" while lowering its price target to $14 from $17.
The analysts action comes on the heels of the company's disappointing first quarter earnings results that saw Kodiak miss analysts earnings and revenue guidance.
Must Read: Warren Buffett's 10 Favorite Growth Stocks
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
TheStreet Ratings team rates KODIAK OIL & GAS CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate KODIAK OIL & GAS CORP (KOG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- KOG's very impressive revenue growth greatly exceeded the industry average of 7.5%. Since the same quarter one year prior, revenues leaped by 103.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KODIAK OIL & GAS CORP has improved earnings per share by 41.7% 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, KODIAK OIL & GAS CORP increased its bottom line by earning $0.53 versus $0.49 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.53).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 39.9% when compared to the same quarter one year prior, rising from $33.29 million to $46.57 million.
- Net operating cash flow has significantly increased by 59.87% to $168.07 million when compared to the same quarter last year. In addition, KODIAK OIL & GAS CORP has also vastly surpassed the industry average cash flow growth rate of -22.86%.
- The gross profit margin for KODIAK OIL & GAS CORP is currently very high, coming in at 78.97%. Regardless of KOG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KOG's net profit margin of 16.95% significantly outperformed against the industry.
- You can view the full analysis from the report here: KOG Ratings Report