NEW YORK (TheStreet) -- Shares of Clean Diesel Technologies (CDTI) are soaring 23.41% to $2.53 in Tuesday's afternoon trading session after the global vehicle emissions control system provider released initial vehicle test results for Spinel, its proprietary clean emissions exhaust technology.

"These encouraging initial results from rigorous FTP testing demonstrate the significant potential of our Spinel technology," CEO Chris Harris said.

The test, which was conducted at an independent test facility using the industry standard Federal Test Procedure (FTP) on a 2014 General Motors (GM) - Get General Motors Company (GM) Report Buick, showed that a Spinel underfloor catalyst with a 97% less platinum group metal (PGM) achieved emissions control performance equivalent to the original equipment manufactures (OEM) catalyst.

PGM reduction could lead to a double-digit dollar cost savings per vehicle, the company noted.

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"In addition, analysis of the post-test catalysts have provided insights into further improvements, reinforcing the possibility that Spinel eventually might be able to eliminate PGMs altogether," Harris stated.

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

"We rate CLEAN DIESEL TECHNOLOGIES (CDTI) 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, generally high debt management risk, disappointing return on equity, poor profit margins and weak operating cash flow."

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 compared to the Auto Components industry average, but is greater than that of the S&P 500. The net income has decreased by 9.8% when compared to the same quarter one year ago, dropping from -$2.50 million to -$2.74 million.
  • The debt-to-equity ratio of 1.48 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, CDTI maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Auto Components industry and the overall market, CLEAN DIESEL TECHNOLOGIES's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CLEAN DIESEL TECHNOLOGIES is currently lower than what is desirable, coming in at 25.62%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -31.62% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$2.69 million or 235.48% 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: CDTI Ratings Report