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Why Perma-Fix Environmental Services (PESI) Stock Is Rising Today

Stocks in this article: PESI

NEW YORK (TheStreet) -- Shares of Perma-Fix Environmental Services, Inc.  (PESI) are higher, up 10.54% to $4.51, after it announced it was awarded a waste treatment services contract valued at $9 million by the U.S. Department of Navy.

The base term of the contract is one year, with options that would extend it to May 2019.

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Separately, TheStreet Ratings team rates PERMA-FIX ENVIRONMENTAL SVCS as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate PERMA-FIX ENVIRONMENTAL SVCS (PESI) a SELL. This is driven by several 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, 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 Commercial Services & Supplies industry. The net income has significantly decreased by 36.3% when compared to the same quarter one year ago, falling from -$2.91 million to -$3.97 million.
  • 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 Commercial Services & Supplies industry and the overall market, PERMA-FIX ENVIRONMENTAL SVCS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for PERMA-FIX ENVIRONMENTAL SVCS is currently extremely low, coming in at 10.92%. Regardless of PESI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PESI's net profit margin of -37.64% significantly underperformed when compared to the industry average.
  • PERMA-FIX ENVIRONMENTAL SVCS's earnings per share declined by 32.0% in the most recent quarter compared to 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, PERMA-FIX ENVIRONMENTAL SVCS reported poor results of -$3.03 versus -$0.30 in the prior year. This year, the market expects an improvement in earnings (-$0.32 versus -$3.03).
  • The revenue fell significantly faster than the industry average of 3.8%. Since the same quarter one year prior, revenues fell by 46.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: PESI Ratings Report
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