NEW YORK (TheStreet) -- Warren Resources (WRES shares are down 2.43% to $1.21 in trading on Thursday as oil prices continue to show volatility, falling today to end the consecutive gains streak crude prices experienced this week.
Oil prices are falling today after OPEC reported that its oil output in March increased by 810,000 barrels, confirming speculation that it was increasing its production in spite of a glut of supply already on the market.
Industry standard Brent crude contracts for May delivery are down 1.12% to $62.61 per barrel, while West Texas crude for May delivery is also declining 1.72% to $55.42 per barrel.
Today's price decline is a reversal from yesterday's gains after reports showed that U.S. oil output had slowed last week though supplies still reached all time highs.
TheStreet Ratings team rates WARREN RESOURCES INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WARREN RESOURCES INC (WRES) 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 robust revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 25.8%. 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 58.45%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.26% trails the industry average.
- The debt-to-equity ratio of 1.48 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.38, which clearly demonstrates the inability to cover short-term cash needs.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, WARREN RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: WRES Ratings Report