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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 disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- 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. Compared to other companies in the Diversified Consumer Services industry and the overall market, LINCOLN EDUCATIONAL SERVICES'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 -$10.05 million or 487.55% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for LINCOLN EDUCATIONAL SERVICES is rather high; currently it is at 54.09%. Regardless of LINC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LINC's net profit margin of -11.00% significantly underperformed when compared to the industry average.
- The revenue fell significantly faster than the industry average of 20.9%. Since the same quarter one year prior, revenues fell by 12.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- LINCOLN EDUCATIONAL SERVICES has improved earnings per share by 32.3% in the most recent quarter compared to 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, LINCOLN EDUCATIONAL SERVICES swung to a loss, reporting -$1.08 versus $0.78 in the prior year. This year, the market expects an improvement in earnings (-$0.41 versus -$1.08).
Lincoln Educational Services Corporation provides career-oriented post-secondary education services in the United States. Lincoln Educational Services has a market cap of $115.7 million and is part of the services sector and diversified services industry. Shares are down 12.9% year to date as of the close of trading on Wednesday.
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