Friday, March 21, 2014

Why Geospace Technologies Corp (GEOS) Is Plummeting

NEW YORK (TheStreet) -- Geospace Technologies Corp (GEOS) plunged over Friday's session after notifying the SEC an order it expected to deliver in its third quarter had been postponed.

By market close, shares had taken off 15.1% to $62.89. Trading volume of 1 million was more than five times its three-month daily average.

In its 8-K filing with the SEC, the developer of seismic data instruments said a previously announced $29.4 million order would be delayed. The order was from Seafloor Geophysical Solutions for 2,300 stations of its deepwater OBX seafloor node.

Seafloor advised Geospace a portion of its capital commitment had been withdrawn and that it was currently seeking new investors to fund the purchase order. "While the possibility still exists that delivery of the system to SGS may occur in the company's fiscal third quarter, this event could result in a postponement of the delivery of this system beyond the fiscal third quarter. As a result, the company is not currently able to estimate when the system delivery might occur," Geospace said in the filing. Must Read: Warren Buffett's 10 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreet Ratings team rates GEOSPACE TECHNOLOGIES CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation: "We rate GEOSPACE TECHNOLOGIES CORP (GEOS) a BUY. This is driven by multiple 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 30.3%. Growth in the company's revenue appears to have helped boost the earnings per share. GEOS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GEOS has a quick ratio of 2.17, which demonstrates the ability of the company to cover short-term liquidity needs. The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, GEOSPACE TECHNOLOGIES CORP's return on equity exceeds that of both the industry average and the S&P 500. Net operating cash flow has significantly increased by 2596.87% to $52.73 million when compared to the same quarter last year. In addition, GEOSPACE TECHNOLOGIES CORP has also vastly surpassed the industry average cash flow growth rate of 23.31%. 49.89% is the gross profit margin for GEOSPACE TECHNOLOGIES CORP which we consider to be strong. Regardless of GEOS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GEOS's net profit margin of 23.85% significantly outperformed against the industry. You can view the full analysis from the report here: GEOS Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Stock quotes in this article: GEOS 

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