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 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 1970.8% when compared to the same quarter one year ago, falling from $27.64 million to -$517.08 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, ITRON INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ITRON INC 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 -84.00% 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 43.49%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1967.64% 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.
- ITRON 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ITRON INC turned its bottom line around by earning $2.56 versus -$0.09 in the prior year. This year, the market expects an improvement in earnings ($4.34 versus $2.56).
Itron, Inc. provides products and services for the energy and water markets worldwide. It produces standard electricity, natural gas, and water meters for residential, commercial, industrial, and transmission and distribution customers. The company has a P/E ratio of 7.8, below the average electronics industry P/E ratio of 11.8 and below the S&P 500 P/E ratio of 17.7. Itron has a market cap of $1.3 billion and is part of the
industry. Shares are down 35.6% year to date as of the close of trading on Thursday.
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