CEC Entertainment Inc. Stock Downgraded (CEC)
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- Regardless of the drop in revenue, the company managed to outperform against the industry average of 2.6%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 36.40% is the gross profit margin for CEC ENTERTAINMENT INC which we consider to be strong. Regardless of CEC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CEC's net profit margin of -0.33% significantly underperformed when compared to the industry average.
- 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 121.5% when compared to the same quarter one year ago, falling from $2.73 million to -$0.59 million.
- The debt-to-equity ratio is very high at 2.88 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CEC has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
-- Written by a member of TheStreet Ratings Staff
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