NEW YORK (
-- Powerwave Technologies
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow and generally weak debt management.
Highlights from the ratings report include:
- When compared to other companies in the Communications Equipment industry and the overall market, POWERWAVE TECHNOLOGIES INC's return on equity is below that of both the industry average and the S&P 500.
- This stock has increased by 119.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- The debt-to-equity ratio is very high at 3.44 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, PWAV's quick ratio is somewhat strong at 1.09, demonstrating the ability to handle short-term liquidity needs.
- Net operating cash flow has significantly decreased to -$0.04 million or 100.93% 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 POWERWAVE TECHNOLOGIES INC is currently lower than what is desirable, coming in at 29.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.10% is significantly below that of the industry average.
Powerwave Technologies, Inc. engages in the design, manufacture, marketing, and sale of wireless solutions for wireless communications networks worldwide. The company has a P/E ratio of 51.3, below the average telecommunications industry P/E ratio of 59.8 and above the S&P 500 P/E ratio of 17.7. Powerwave has a market cap of $607.3 million and is part of the
industry. Shares are up 40.2% year to date as of the close of trading on Monday.
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