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"We rate WPX ENERGY INC (WPX) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, WPX's share price has jumped by 31.85%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WPX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Net operating cash flow has significantly increased by 118.05% to $314.00 million when compared to the same quarter last year. In addition, WPX ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -5.21%.
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that WPX's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.0%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 44.84% is the gross profit margin for WPX ENERGY INC which we consider to be strong. Regardless of WPX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WPX's net profit margin of -16.58% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: WPX Ratings Report