Will This Analyst Action Help Ocean Rig UDW (ORIG) Stock Today?

NEW YORK (TheStreet) -- Ocean Rig UDW Inc. (ORIG) price target was raised to $24 from $23 by analysts at Barclays (BCS) on Tuesday in response to the the release of the company's first quarter earnings results last week.

The firm maintained its "overweight" rating on the company's shares.

Ocean Rig UDW reported revenue of $360.76 million, well above analysts expectations of $330.07 million while reporting a net loss of -1 cent per share, 1 cent better than analysts expectations.

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Separately, TheStreet Ratings team rates OCEAN RIG UDW INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate OCEAN RIG UDW INC (ORIG) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally higher debt management risk."

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

  • ORIG's very impressive revenue growth greatly exceeded the industry average of 11.2%. Since the same quarter one year prior, revenues leaped by 50.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • OCEAN RIG UDW 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, OCEAN RIG UDW INC turned its bottom line around by earning $0.48 versus -$1.00 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $0.48).
  • The gross profit margin for OCEAN RIG UDW INC is rather high; currently it is at 59.96%. 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 11.48% trails the industry average.
  • The debt-to-equity ratio of 1.34 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, ORIG has managed to keep a strong quick ratio of 1.65, which demonstrates the ability to cover short-term cash needs.
  • In its most recent trading session, ORIG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: ORIG Ratings Report
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