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, poor profit margins, generally disappointing historical performance in the stock itself 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 126.5% when compared to the same quarter one year ago, falling from $40.23 million to -$10.67 million.
- 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. In comparison to the other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, HANWHA SOLARONE CO LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for HANWHA SOLARONE CO LTD is currently extremely low, coming in at 10.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.80% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 61.73%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 124.52% 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.
- HANWHA SOLARONE CO LTD 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HANWHA SOLARONE CO LTD turned its bottom line around by earning $1.52 versus -$0.40 in the prior year. For the next year, the market is expecting a contraction of 55.3% in earnings ($0.68 versus $1.52).
Hanwha SolarOne, Ltd. provides various energy solutions including silicon ingots, wafers, monocrystalline and polycrystalline solar cells, and solar modules. The company also provides project development and financing services. The company has a P/E ratio of 2.2, below the average electronics industry P/E ratio of 2.3 and below the S&P 500 P/E ratio of 17.7. Hanwha SolarOne has a market cap of $383.2 million and is part of the
industry. Shares are down 53.9% year to date as of the close of trading on Thursday.
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