NEW YORK (TheStreet) -- Shares of On Track Innovations (OTIV) - Get Report were falling 15.3% to $1.61 Friday after the mobile payments company announced the pricing for its 6.25 million share public offering.
On Track Innovations priced the 6.25 million ordinary shares in the public offering at $1.60 a share. The company granted the underwriter of the offering a 30-day option to by 937,500 ordinary shares to cover any over-allotments.
The company said it expects to receive net proceeds of about $9.1 million from the public offering. The offering is expected to close on or about Nov. 26, 2014.
TheStreet Ratings team rates ON TRACK INNOVATIONS as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ON TRACK INNOVATIONS (OTIV) 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, disappointing return on equity 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 Computers & Peripherals industry. The net income has significantly decreased by 214.2% when compared to the same quarter one year ago, falling from $1.75 million to -$2.00 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 Computers & Peripherals industry and the overall market, ON TRACK INNOVATIONS's return on equity significantly trails that of both the industry average and the S&P 500.
- ON TRACK INNOVATIONS 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, ON TRACK INNOVATIONS continued to lose money by earning -$0.21 versus -$0.54 in the prior year. For the next year, the market is expecting a contraction of 42.9% in earnings (-$0.30 versus -$0.21).
- OTIV, with its decline in revenue, underperformed when compared the industry average of 13.8%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.05 is sturdy.
- You can view the full analysis from the report here: OTIV Ratings Report