WPX Energy (WPX) Down In After-Hours Trading

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.

Trade-Ideas LLC identified WPX Energy ( WPX) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified WPX Energy as such a stock due to the following factors:

  • WPX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $54.2 million.
  • WPX is down 4% today from today's close.

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More details on WPX:

WPX Energy, Inc., an independent natural gas and oil exploration and production company, is engaged in the exploitation and development of unconventional properties in the United States. Currently there are 3 analysts that rate WPX Energy a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for WPX Energy has been 3.7 million shares per day over the past 30 days. WPX Energy has a market cap of $2.6 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.54 and a short float of 3% with 1.29 days to cover. Shares are down 37.1% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates WPX Energy as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 28.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for WPX ENERGY INC is rather high; currently it is at 54.79%. It has increased significantly from the same period last year. Along with this, the net profit margin of 7.80% is above that of the industry average.
  • The current debt-to-equity ratio, 0.50, 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 0.58, displays a potential problem in covering short-term cash needs.
  • WPX has underperformed the S&P 500 Index, declining 13.73% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WPX ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.


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