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, weak operating cash flow and generally disappointing historical performance in the stock itself.
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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 583.3% when compared to the same quarter one year ago, falling from $7.25 million to -$35.03 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, INVACARE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for INVACARE CORP is currently lower than what is desirable, coming in at 31.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.80% is significantly below that of the industry average.
- Net operating cash flow has decreased to $32.49 million or 31.92% when compared to the same quarter last year. Despite a decrease in cash flow INVACARE CORP is still fairing well by exceeding its industry average cash flow growth rate of -52.19%.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.31%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 600.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
Invacare Corporation designs, manufactures, and distributes medical equipment and supplies for the non-acute care environment, including the home health care, retail, and extended care markets. The company has a P/E ratio of 15, above the average health services industry P/E ratio of 13.9 and below the S&P 500 P/E ratio of 17.7. Invacare has a market cap of $501.5 million and is part of the
industry. Shares are up 16.9% year to date as of the close of trading on Friday.
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