NEW YORK (TheStreet) -- eOn Communications (EONC)  stock is extending its rally through Tuesday's session after adding 44.8% a day earlier. 

By early afternoon, shares had surged 23.2% to $4.30. Trading volume of 1.1 million shares was more than nine times its three-month daily average. 

The company has soared on heavier-than-normal volume, despite the absence of company news. 

Must Read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.


TST Recommends

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

"We rate EON COMMUNICATIONS CORP (EONC) a SELL. This is driven by some concerns, 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and poor profit margins."

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

  • EON COMMUNICATIONS CORP has experienced 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, EON COMMUNICATIONS CORP swung to a loss, reporting -$0.01 versus $0.15 in the prior year.
  • 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 Communications Equipment industry. The net income has significantly decreased by 960.2% when compared to the same quarter one year ago, falling from $0.08 million to -$0.71 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 Communications Equipment industry and the overall market, EON COMMUNICATIONS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for EON COMMUNICATIONS CORP is rather low; currently it is at 21.43%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -15.41% is significantly below that of the industry average.
  • EONC, with its decline in revenue, slightly underperformed the industry average of 2.3%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.