Analyst Explains Why They Downgraded Their Rating on Ion Geophysical Corp (IO)


Ion Geophysical Corp (NYSE: IO) received a Hold rating from Oppenheimer analyst Colin Rusch today. The company’s shares opened today at $10.30, close to its 52-week low of $8.

Rusch observed:

“As IO waits for bid rounds in to move forward, it appears to be controlling what it can effectively, despite more challenging than expected industry dynamics. While IO continues to point to a large and growing pipeline, procurement practices and budget release by customers look at risk for further rationalization and potential pressure on IO financials. With the stock down ~70% from its recent high (vs. up 1.5% for the S&P 500), we note management’s new stock compensation plan may not sit well with some investors as management is pricing RSUs after a large sell-off in front of a seasonally strong quarter. We believe this move could test investor trust even as business rebounds. We move to the sidelines given political uncertainty and limited visibility to revenue growth.”

According to TipRanks.com, Rusch is a 4-star analyst with an average return of 7.2% and a 46.2% success rate. Rusch covers the Industrial Goods sector, focusing on stocks such as Capstone Turbine Corp, Canadian Solar Inc, and Fuelcell Energy.

The the analyst consensus on Ion Geophysical Corp is currently a Moderate Buy rating.

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Based on Ion Geophysical Corp’s latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $25.87 million. In comparison, last year the company had a net profit of $4.94 million.

Based on the recent corporate insider activity of 55 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of IO in relation to earlier this year.

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ION Geophysical Corp. is a technology focused company, which engages in the provision of geoscience technology, services, and solutions to the oil and gas industry. It operates through the following business segments: E&P Technology and Services, E&P Operations Optimization, and Ocean Bottom Seismic Services.