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 generally disappointing historical performance in the stock itself, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.
Highlights from the ratings report include:
- The share price of QUINSTREET INC has not done very well: it is down 20.26% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- 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 Internet Software & Services industry. The net income has significantly decreased by 54.7% when compared to the same quarter one year ago, falling from $6.34 million to $2.87 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Internet Software & Services industry and the overall market, QUINSTREET INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for QUINSTREET INC is currently lower than what is desirable, coming in at 30.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.10% significantly trails the industry average.
- Net operating cash flow has decreased to $17.43 million or 39.59% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
QuinStreet, Inc. operates as a vertical marketing and media online company in the United States and internationally. It provides direct marketing services, including the delivery of leads or paid clicks; and hosted solution and related services for clients in the direct selling industry. The company has a P/E ratio of 21.6, below the average media industry P/E ratio of 22.1 and above the S&P 500 P/E ratio of 17.7. QuinStreet has a market cap of $380.8 million and is part of the
industry. Shares are down 10.1% year to date as of the close of trading on Monday.
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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.