NEW YORK (TheStreet) -- Rochester Medical Corporation (Nasdaq:ROCM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- 49.50% is the gross profit margin for ROCHESTER MEDICAL CORP which we consider to be strong. Regardless of ROCM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ROCM's net profit margin of -9.80% significantly underperformed when compared to the industry average.
- The share price of ROCHESTER MEDICAL CORP has not done very well: it is down 7.59% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, ROCHESTER MEDICAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income has significantly decreased by 257.7% when compared to the same quarter one year ago, falling from -$0.35 million to -$1.26 million.
- ROCHESTER MEDICAL CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ROCHESTER MEDICAL CORP reported poor results of -$0.02 versus $0.00 in the prior year. For the next year, the market is expecting a contraction of 400.0% in earnings (-$0.10 versus -$0.02).
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