NEW YORK (
-- Imation Corporation
) 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, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- The share price of IMATION CORP has not done very well: it is down 11.11% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
- The gross profit margin for IMATION CORP is rather low; currently it is at 20.30%. Regardless of IMN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, IMN's net profit margin of -2.30% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to -$19.10 million or 127.92% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Computers & Peripherals industry and the overall market, IMATION CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Computers & Peripherals industry. The net income has significantly decreased by 176.9% when compared to the same quarter one year ago, falling from -$2.60 million to -$7.20 million.
Imation Corp. provides a range of removable data storage media products, as well as consumer electronic products. Imation has a market cap of $396 million and is part of the
industry. Shares are down 2.1% year to date as of the close of trading on Thursday.
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