Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
-- I D Systems
) 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, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
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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 against the S&P 500 and did not exceed that of the Electronic Equipment, Instruments & Components industry. The net income has decreased by 8.0% when compared to the same quarter one year ago, dropping from -$2.62 million to -$2.83 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 Electronic Equipment, Instruments & Components industry and the overall market, I D SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.65 million or 212.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, IDSY has underperformed the S&P 500 Index, declining 22.66% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- I D SYSTEMS INC's earnings per share declined by 9.1% in the most recent quarter compared to 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, I D SYSTEMS INC reported poor results of -$0.63 versus -$0.23 in the prior year. This year, the market expects an improvement in earnings (-$0.16 versus -$0.63).
I.D. Systems, Inc. develops, markets, and sells wireless solutions for managing and securing industrial vehicles, transportation assets, and rental vehicles. I D Systems has a market cap of $51 million and is part of the technology sector and telecommunications industry. Shares are down 31.6% year to date as of the close of trading on Friday.
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