Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK (TheStreet) -- Uroplasty (Nasdaq:UPI) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
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- UPI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.74%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, UROPLASTY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UROPLASTY INC is currently very high, coming in at 87.00%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -12.11% is in-line with the industry average.
- Net operating cash flow has significantly increased by 159.63% to $0.26 million when compared to the same quarter last year. In addition, UROPLASTY INC has also vastly surpassed the industry average cash flow growth rate of 8.21%.
- UROPLASTY INC has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, UROPLASTY INC continued to lose money by earning -$0.20 versus -$0.24 in the prior year. This year, the market expects an improvement in earnings (-$0.16 versus -$0.20).
-- Written by a member of TheStreet Ratings Staff
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