Why DryShips (DRYS) Stock Is Down After-Hours Today

NEW YORK (TheStreet) -- DryShips (DRYS) was falling 3.9% to $2.94 in after-hours trading Thursday after missing analysts' estimates for earnings in the first quarter.

For the first quarter DryShips reported a loss of -4 cents a share, , while analysts surveyed by Thomson Reuters expected the company to break even for the quarter. Revenue grew 43% from the year-ago quarter to $457.48 million. Analysts expected revenue of $445.56 million for the quarter.

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

"We rate DRYSHIPS INC (DRYS) 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 growth in earnings per share. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

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

  • DRYS's very impressive revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues leaped by 52.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 82.35% and other important driving factors, this stock has surged by 61.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The gross profit margin for DRYSHIPS INC is rather high; currently it is at 54.72%. 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 -5.64% is in-line with the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Marine industry and the overall market, DRYSHIPS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 2.13 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.48, which clearly demonstrates the inability to cover short-term cash needs.
  • You can view the full analysis from the report here: DRYS 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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