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NEW YORK (TheStreet) -- Blackhawk Network (HAWK) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D.  TheStreet Ratings Team has this to say about their recommendation:

TheStreet Ratings team rates BLACKHAWK NETWORK HLDGS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate BLACKHAWK NETWORK HLDGS INC (HAWK) 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 generally high debt management risk, disappointing return on equity, deteriorating net income and feeble growth in its earnings per share."

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

• The debt-to-equity ratio of 1.43 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, HAWK maintains a poor quick ratio of 0.92, which illustrates the inability to avoid short-term cash problems.
• Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, BLACKHAWK NETWORK HLDGS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
• The change in net income from the same quarter one year ago has exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income has decreased by 13.3% when compared to the same quarter one year ago, dropping from $49.27 million to $42.72 million.
• BLACKHAWK NETWORK HLDGS INC's earnings per share declined by 16.3% 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 year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, BLACKHAWK NETWORK HLDGS INC reported lower earnings of $0.81 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($2.06 versus $0.81).
• The gross profit margin for BLACKHAWK NETWORK HLDGS INC is currently very high, coming in at 82.20%. Regardless of HAWK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HAWK's net profit margin of 6.48% is significantly lower than the industry average.
• You can view the full analysis from the report here: HAWK Ratings Report