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NEW YORK (TheStreet) -- Martha Stewart Living Omnimedia (MSO) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARTHA STEWART LIVING OMNIMD (MSO) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Media industry. The net income has significantly decreased by 153.0% when compared to the same quarter one year ago, falling from -$4.30 million to -$10.87 million.
- MARTHA STEWART LIVING OMNIMD has experienced 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MARTHA STEWART LIVING OMNIMD continued to lose money by earning -$0.01 versus -$0.83 in the prior year. For the next year, the market is expecting a contraction of 350.0% in earnings (-$0.05 versus -$0.01).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, MARTHA STEWART LIVING OMNIMD's return on equity significantly trails that of both the industry average and the S&P 500.
- MSO, with its decline in revenue, underperformed when compared the industry average of 7.8%. Since the same quarter one year prior, revenues fell by 11.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for MARTHA STEWART LIVING OMNIMD is rather high; currently it is at 53.08%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -36.44% is in-line with the industry average.
- You can view the full analysis from the report here: MSO Ratings Report