Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Highlights from the ratings report include:
- NEUTRAL TANDEM 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, NEUTRAL TANDEM INC reported lower earnings of $0.81 versus $0.97 in the prior year. For the next year, the market is expecting a contraction of 79.0% in earnings ($0.17 versus $0.81).
- 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 146.8% when compared to the same quarter one year ago, falling from $5.85 million to -$2.74 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 Diversified Telecommunication Services industry and the overall market, NEUTRAL TANDEM INC'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 NEUTRAL TANDEM INC is currently lower than what is desirable, coming in at 33.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.00% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $7.52 million or 56.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Neutral Tandem, Inc., doing business as Inteliquent, provides interconnection and interoperability solutions worldwide. It offers voice, IP transit, and Ethernet telecommunications services primarily on a wholesale basis. The company has a P/E ratio of 5.1, below the S&P 500 P/E ratio of 17.7. Inteliquent has a market cap of $71.2 million and is part of the technology sector and telecommunications industry. Shares are down 79.3% year to date as of the close of trading on Wednesday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff
FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!