Why Odyssey Marine Exploration (OMEX) Stock Is Down Today

NEW YORK (TheStreet) -- Odyssey Marine Exploration (OMEX) was falling -15.7% to $1.85 Tuesday after missing analysts' expectations for earnings and revenue for the first quarter.

For the first quarter Odyssey Marine Exploration reported a loss of -12 cents a share, missing the Capital IQ Consensus Estimate of a loss of -9 cents a share by 3 cents. Revenue fell -33.3% from the year-ago quarter to $0.6 million. Analysts expected revenue of $1.23 million for the quarter.

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TheStreet Ratings team rates ODYSSEY MARINE EXPLORATION as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ODYSSEY MARINE EXPLORATION (OMEX) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk."

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

  • Net operating cash flow has decreased to $14.71 million or 18.70% 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.
  • The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, OMEX's quick ratio is somewhat strong at 1.15, demonstrating the ability to handle short-term liquidity needs.
  • OMEX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.88%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • Compared to other companies in the Professional Services industry and the overall market, ODYSSEY MARINE EXPLORATION's return on equity significantly trails that of both the industry average and the S&P 500.
  • 41.21% is the gross profit margin for ODYSSEY MARINE EXPLORATION which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 62.35% significantly outperformed against the industry average.
  • You can view the full analysis from the report here: OMEX Ratings Report

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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.

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