NEW YORK (TheStreet) -- Quicksilver Resources (KWK) shares are down 22.8% on heavy trading Friday after analysts at Howard Weil slashed the oil company's price target to $1 from $4 while reiterating its "sector perform" rating.
More than 6 million shares have been traded so far today, well ahead of the stock's 3.37 million daily average over the last three months.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
TheStreet Ratings team rates QUICKSILVER RESOURCES INC as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:
"We rate QUICKSILVER RESOURCES INC (KWK) a SELL. This is based on some significant below-par investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 114.9% when compared to the same quarter one year ago, falling from $242.53 million to -$36.10 million.
- The gross profit margin for QUICKSILVER RESOURCES INC is currently lower than what is desirable, coming in at 33.62%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -30.58% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 48.88%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 115.32% compared to the year-earlier 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.
- QUICKSILVER RESOURCES 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, QUICKSILVER RESOURCES INC turned its bottom line around by earning $0.90 versus -$13.83 in the prior year. For the next year, the market is expecting a contraction of 130.0% in earnings (-$0.27 versus $0.90).
- KWK, with its decline in revenue, underperformed when compared the industry average of 3.0%. Since the same quarter one year prior, revenues fell by 32.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: KWK Ratings Report