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 generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- MAD CATZ INTERACTIVE 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, MAD CATZ INTERACTIVE INC reported poor results of -$0.18 versus -$0.04 in the prior year.
- 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 Household Durables industry. The net income has significantly decreased by 1612.4% when compared to the same quarter one year ago, falling from $0.80 million to -$12.16 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 Household Durables industry and the overall market, MAD CATZ INTERACTIVE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for MAD CATZ INTERACTIVE INC is currently lower than what is desirable, coming in at 27.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -49.41% is significantly below that of the industry average.
- In its most recent trading session, MCZ has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
Mad Catz Interactive, Inc. designs, manufactures, markets, sells, and distributes accessories for videogame platforms, personal computers (PC) and Mac, and iPod and other audio devices. Mad Catz Interactive has a market cap of $29.1 million and is part of the technology sector and computer hardware industry. Shares are down 8.2% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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