NEW YORK (TheStreet) -- Hercules Offshore (HERO shares are down 9.5% to $2.75 on Thursday after having its price target lowered to $4 from $6 by analysts at Cowen (COWN - Get Report) , while reiterating its "outperform" rating.
TheStreet Ratings team rates HERCULES OFFSHORE INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HERCULES OFFSHORE INC (HERO) a SELL. This is driven by a number of negative factors, 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 disappointing return on equity, 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:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, HERCULES OFFSHORE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $24.33 million or 43.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio of 1.42 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, HERO has managed to keep a strong quick ratio of 1.81, which demonstrates the ability to cover short-term cash needs.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 58.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 60.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- HERCULES OFFSHORE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HERCULES OFFSHORE INC continued to lose money by earning -$0.17 versus -$0.79 in the prior year. This year, the market expects an improvement in earnings ($0.19 versus -$0.17).
- You can view the full analysis from the report here: HERO Ratings Report