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Why Female Health Co. (FHCO) Stock Continues To Decline Today

Stocks in this article: FHCO

NEW YORK (TheStreet) -- Female Health Company (FHCO) shares continue to drop Tuesday, down -12.8% to $4.17, after announcing that it would suspend quarterly dividend payments in an effort to promote more sustainable earnings and revenue growth.

"In order to position the company to pursue a growth strategy, the board of directors has elected to suspend the payment of quarterly dividends at the present time and devote cash flows towards these strategic initiatives that have the potential to accelerate the company's long-term growth in revenue and earnings," CEO Karen King said in a statement.

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TheStreet Ratings team rates FEMALE HEALTH CO as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate FEMALE HEALTH CO (FHCO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FHCO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, FHCO has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for FEMALE HEALTH CO is rather high; currently it is at 58.19%. Regardless of FHCO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FHCO's net profit margin of 8.62% compares favorably to the industry average.
  • FHCO, with its very weak revenue results, has greatly underperformed against the industry average of 0.1%. Since the same quarter one year prior, revenues plummeted by 54.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Personal Products industry. The net income has significantly decreased by 89.3% when compared to the same quarter one year ago, falling from $3.49 million to $0.38 million.
  • Net operating cash flow has significantly decreased to -$0.02 million or 100.40% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: FHCO Ratings Report
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