TheStreet Ratings team rates RENESOLA LTD as a Sell with a ratings score of D. The team has this to say about their recommendation:
"We rate RENESOLA LTD (SOL) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, poor profit margins and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 154.7% when compared to the same quarter one year ago, falling from -$78.61 million to -$200.25 million.
- The debt-to-equity ratio is very high at 5.54 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.45, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, RENESOLA LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for RENESOLA LTD is currently extremely low, coming in at 14.68%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, SOL's net profit margin of -47.76% significantly underperformed when compared to the industry average.
- RENESOLA LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, RENESOLA LTD reported poor results of -$2.80 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings (-$0.79 versus -$2.80).
- You can view the full analysis from the report here: SOL Ratings Report