Helix Energy Solutions Q3 Earnings: Time To Buy Struggling NYSE:HLX Stock?

in EARNINGS/INVESTING IDEAS by

Helix Energy Solutions Group, Inc. (NYSE:HLX) is scheduled to report Q3 earnings results after markets close for trading on October 21, 2020.

The company is expected to report earnings of $0.01/share on revenue of $174.4 million. The consensus earnings per share (EPS) of $0.01/share is based on a poll of 4 analysts and represents a decline in eps of −96.4% over the same quarter last year, when the company reported earnings of $0.21/share.

The revenue forecast of $174.4 million based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −18.0%. Last year the company reported $212.6 million in revenue for the quarter.

Expected to report EPS contraction of −96.4% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $174.40 $212.61 −18.0%
EPS $0.01 $0.21 −96.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Helix Energy Solutions Group, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.02 $0.03 66.3% Beat
Q1, 2020 -$0.15 -$0.16 2.5% Beat
Q4, 2019 $0.03 $0.05 56.7% Beat
Q3, 2019 $0.16 $0.21 28.2% Beat
Q2, 2019 $0.14 $0.11 −21.4% Missed
Q1, 2019 $0.02 $0 −79.0% Missed
Q4, 2018 -$0.08 -$0.10 24.9% Beat
Q3, 2018 $0.11 $0.18 62.0% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 23.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $3.92 $4.85 23.7% Increase
April 22, 2020 $1.55 $1.68 8.4% Increase
February 24, 2020 $8.25 $7.14 −13.5% Decline
October 21, 2019 $8.01 $8.94 11.6% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.69, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.69 implies a 0.4% chance of earnings manipulation.

Fundamentals And Technical Analysis

Helix Energy Solutions Group, Inc. is currently trading at $2.67/share, up 2.5% for the day. The company is trading at approximately 26.4% of its 52-week high of $10/share. The company’s stock price is down −44.8% since the last earnings report and down −3.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 39.32 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:HLX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 13.07 and a forward P/E multiple of −16.28.

Helix Energy Solutions Group, Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.24. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $2.67
P/E Ratio 13.1x
P/E Ratio (Fwd) −16.3x
PEG Ratio −3.3
Total Debt / Total Capital 58.6%
Levered Free Cash Flow $12.175 million
EV / EBITDA 5.2x

Finbox

Helix Energy Solutions Group, Inc. is a small-cap stock with a market capitalization of $391.7 million and a total enterprise value of $781.5 million. The company operates in the Energy sector and the Energy Equipment & Services industry.

Helix Energy Solutions Group, Inc., an offshore energy services company, provides specialty services to the offshore energy industry primarily in Brazil, the Gulf of Mexico, North Sea, the Asia Pacific, and West Africa regions. The company operates through three segments: Well Intervention, Robotics, and Production Facilities. The company engineers, manages, and conducts well intervention operations comprising production enhancement and abandonment, and construction in water depths ranging from 200 to 10,000 feet; and offers remotely operated vehicles (ROVs), trenchers, and ROVDrills for offshore construction and well intervention services. It also offers intervention engineering; inspection, repair, and maintenance of production structures, trees, jumpers, risers, pipelines, and subsea equipment; and life of field support services. In addition, the company provides reclamation and remediation services; well plugging and abandonment services; pipeline abandonment services; and site inspections. Further, it engages in the installation of flowlines, control umbilicals, and manifold assemblies and risers; trenching and burial of pipelines; installation and tie-in of riser and manifold assembly; commissioning, testing, and inspection activities; and provision of cable and umbilical lay, and connection services. Additionally, the company offers oil and natural gas processing facilities and services to oil and gas companies; and fast response system. It serves independent oil and gas producers and suppliers, pipeline transmission companies, renewable energy companies, and offshore engineering and construction firms. The company was formerly known as Cal Dive International, Inc. and changed its name to Helix Energy Solutions Group, Inc. in March 2006. Helix Energy Solutions Group, Inc. was incorporated in 1979 and is headquartered in Houston, Texas.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.