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 weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$55.95 million or 147.15% 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 OCZ TECHNOLOGY GROUP INC is currently lower than what is desirable, coming in at 25.90%. Regardless of OCZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OCZ's net profit margin of -5.50% significantly underperformed when compared to the industry average.
- OCZ has underperformed the S&P 500 Index, declining 6.94% from its price level of one year ago. 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.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, OCZ TECHNOLOGY GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- OCZ has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.45, which illustrates the ability to avoid short-term cash problems.
OCZ Technology Group, Inc. engages in the design, manufacture, and distribution of solid state drives (SSDs) and computer components primarily in the United States, Canada, Germany, the Middle East, Africa, and other European countries. OCZ Technology Group has a market cap of $386.3 million and is part of the
industry. Shares are down 13.6% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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.