NEW YORK (TheStreet) -- Cutera (Nasdaq:CUTR) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- 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 36.6% when compared to the same quarter one year ago, falling from -$3.86 million to -$5.27 million.
- Net operating cash flow has significantly decreased to -$4.87 million or 223.78% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of CUTERA INC has not done very well: it is down 16.59% 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 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 Health Care Equipment & Supplies industry and the overall market, CUTERA INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CUTERA INC is rather high; currently it is at 52.30%. Regardless of CUTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CUTR's net profit margin of -33.50% significantly underperformed when compared to the industry average.
-- Written by a member of TheStreet Ratings Staff
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