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TheStreet Ratings team rates REALD INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate REALD INC (RLD) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RLD's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RLD has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for REALD INC is currently very high, coming in at 76.14%. 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 -34.66% is in-line with the industry average.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 4066.1% when compared to the same quarter one year ago, falling from -$0.27 million to -$11.29 million.
- Net operating cash flow has decreased to $7.16 million or 47.24% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: RLD Ratings Report