NEW YORK (TheStreet) -- Shares of Capstone Turbine Corp (CPST) - Get Capstone Turbine Corporation Report were slipping, down 5.12% to 38 cents in early market trading Thursday, after the company had its rating lowered by analysts at Northland Securities this morning.

Analysts at the firm downgraded the turbine manufacturer to "market perform" from "outperform."

Northland also cut its price target on shares 40 cents from its previous $2 target. 

Shares of Capstone Turbine have fallen more than 46% so far this year.

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Chatsworth, Calif.-based Capstone Turbine develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications.

Separately, TheStreet Ratings team rates CAPSTONE TURBINE CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CAPSTONE TURBINE CORP (CPST) a SELL. This is driven by multiple 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, weak operating cash flow and generally disappointing historical performance in the stock itself."

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 Electrical Equipment industry. The net income has significantly decreased by 322.9% when compared to the same quarter one year ago, falling from -$3.38 million to -$14.30 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 Electrical Equipment industry and the overall market, CAPSTONE TURBINE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CAPSTONE TURBINE CORP is currently extremely low, coming in at 13.05%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -47.86% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$6.59 million or 74.78% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 66.89%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 400.00% compared to the year-earlier 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.
  • You can view the full analysis from the report here: CPST Ratings Report