Will Isramco (ISRL) Stock Climb In After-Hours Trading Today?

NEW YORK (TheStreet) -- Isramco (ISRL) nearly doubled its revenues during the first quarter earnings period  reporting $21.37 billion in revenue during the quarter compared to the $11.45 billion it posted last year.

The independent oil and natural gas company reported that the increase was due primarily to a growth in service well operations that netted the company $6.4 billion and royalty interest from the Tamar Field offshore Israel which generated net revenue of $5.1 billion.

The company reported net income of $4,185,000, or $1.50 per share, compared to a net loss of -19 cents per share during the same period last year.

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TheStreet Ratings team rates ISRAMCO INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ISRAMCO INC (ISRL) 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 robust revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk."

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

  • ISRL's very impressive revenue growth greatly exceeded the industry average of 0.2%. Since the same quarter one year prior, revenues leaped by 55.0%. 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, ISRL's share price has jumped by 45.56%, exceeding the performance of the broader market during that same time frame. Although ISRL had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • The gross profit margin for ISRAMCO INC is rather high; currently it is at 56.18%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -64.06% is in-line with the industry average.
  • The debt-to-equity ratio is very high at 9.49 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, ISRL has a quick ratio of 0.67, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, ISRAMCO 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: ISRL Ratings Report
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