NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.
Highlights from the ratings report include:
- 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 131.3% when compared to the same quarter one year ago, falling from $11.72 million to -$3.67 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 Health Care Equipment & Supplies industry and the overall market, ENDOLOGIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ENDOLOGIX INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, ENDOLOGIX INC swung to a loss, reporting -$0.51 versus $0.20 in the prior year. This year, the market expects an improvement in earnings (-$0.16 versus -$0.51).
- The gross profit margin for ENDOLOGIX INC is currently very high, coming in at 76.90%. Regardless of ELGX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ELGX's net profit margin of -15.70% significantly underperformed when compared to the industry average.
- ELGX 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. Along with this, the company maintains a quick ratio of 2.58, which clearly demonstrates the ability to cover short-term cash needs.
Endologix, Inc. develops, manufactures, markets, and sells devices for treatments of aortic disorders. Endologix has a market cap of $708.4 million and is part of the
industry. Shares are up 13.5% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet Ratings Staff