At the moment, the debt-to-equity of Rowan Companies plc (NYSE:RDC) is low, standing at 46.61, a figure that is less than the 129.63 average recorded by the industry. This means that the company is currently holding a debt level at 2.51 B. RDC shares have a strong debt-to-equity ratio but their quick ratio which reads 3.00 is strong and might cause problems for them later in the future.
Even though there was a drop of -33.85% in revenue, the company failed to succeed in outperforming the industry average of 2.50%. For the most recent quarter, the net income has dropped by -589.47%. This weakness in their income has affected them and thus decreased their earnings to -$16.00 M. The -33.85% yoy growth of RDC’s revenue has gone down that of the industry average by -4.27%. For the past 12 months, Rowan Companies plc revenue has gone down by -29.58%. The sustained growth in their revenue has helped boost their earnings per share.
They have recorded a -87.73% declining earnings per share earnings. They have recorded a -87.73% declining earnings per share earnings. Analysts expect decrease in earnings is also on the cards next quarter with an average estimate at -$1.17. In the fiscal year 2018, Rowan Companies plc overcame its bottom line by hitting earning $0.57 per share compared to the $2.55 in 2017.
The 12-month return on equity has significantly fallen to -4.26 in comparison to the same data for other companies in the same industry. This shows that there is a major weakness within the organization over the past one year. Comparing them to other companies in the industry and the overall Basic Materials sector, the industry average is -47.92 while 18.90 is of the sector.
Also, looking at the price to cash flow of the company and the industry average, the 10.29 ratio of the stock is higher than the industry’s 4.03.
In addition to their unfavorable P/E ratio, Rowan Companies plc has maintained a gross margin of 26.13. This shows whether the company has what it takes to effectively turn the revenue into profit.
The company’s ROA is -2.68 when compared to -4.93 for the stocks operating in the same industry. This can be attributed to the strength recorded in the net income produced by total assets. Comparing it to other companies in the sector, Rowan Companies plc ROE is above 18.90 that of both the sector average.
The operating profit margin for Rowan Companies plc (RDC) is -10.88%, a figure which is considered to be weak. It has gone -63.91 from the 13.82 over the past 5 years. In addition to this, their operating margin is 53.03 higher than the industry average.
The net profit margin which stood at 7.16 on average in the past 5 years has dropped to -23.47 in the last 12 months. Added to that, this ratio has surpassed the industry net margin that stands at -74.00.
Analysts meanwhile rate Rowan Companies plc (NYSE:RDC) as a buy. Still some above discussed indicators of the $1.35B company show strength while others show weakness. There is little evidence at the moment to justify the expectation of the RDC shares to either perform positively or negatively when compared to other stocks. The primary strengths of Rowan Companies plc can be witnessed in its increased revenue, growing earnings per share, higher return on equity, increased operating cash and high net margin. Subsequently, financial analysis have also identified some weak areas that includes high debt, relatively high P/E ratio, lower return on assets and low net margin.