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NEW YORK (TheStreet) -- Helmerich & Payne (HP - Get Report) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HELMERICH & PAYNE (HP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 13.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HP's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HP has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
- 45.13% is the gross profit margin for HELMERICH & PAYNE which we consider to be strong. Regardless of HP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HP's net profit margin of 17.12% compares favorably to the industry average.
- HELMERICH & PAYNE's earnings per share improvement from the most recent quarter was slightly positive. 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, HELMERICH & PAYNE reported lower earnings of $6.46 versus $6.66 in the prior year. For the next year, the market is expecting a contraction of 14.2% in earnings ($5.55 versus $6.46).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Energy Equipment & Services industry and the overall market, HELMERICH & PAYNE's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: HP Ratings Report
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