One Reason Warren Resources (WRES) Stock Is Down Today

NEW YORK (TheStreet) -- Shares of Warren Resources (WRES) were falling 6.8% to $1.50 after the oil producer announced chairman and CEO Philip A. Epstein resigned from both positions.

The company announced that board member Lance Peterson will take over as interim CEO, effective immediately. Warren Resources board member Dominick D'Alleva was elected as interim chairman of the board.

"Lance has a proven track record of success as a CEO and has a deep understanding of our business, operations and strategy, and an appreciation for the hard work and dedication of our employees," D'Alleva said in a statement. "He has more than 30 years of experience in the oil and gas industry and significant expertise in the acquisition, exploration, development and production of domestic onshore crude oil and gas reserves, as well as in the oil development and recovery activities."

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TheStreet Ratings team rates WARREN RESOURCES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WARREN RESOURCES INC (WRES) 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 revenue growth, reasonable valuation levels 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:

  • The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 16.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for WARREN RESOURCES INC is rather high; currently it is at 65.70%. Regardless of WRES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WRES's net profit margin of 9.19% compares favorably to the industry average.
  • WARREN 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, WARREN RESOURCES INC increased its bottom line by earning $0.42 versus $0.21 in the prior year. For the next year, the market is expecting a contraction of 26.2% in earnings ($0.31 versus $0.42).
  • The share price of WARREN RESOURCES INC has not done very well: it is down 21.32% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • You can view the full analysis from the report here: WRES Ratings Report

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