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.
Highlights from the ratings report include:
- Net operating cash flow has decreased to -$11.75 million or 34.45% 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 SATCON TECHNOLOGY CORP is rather low; currently it is at 24.70%. Regardless of SATC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SATC's net profit margin of -3.40% significantly underperformed when compared to the industry average.
- SATC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 71.53%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 Electrical Equipment industry and the overall market, SATCON TECHNOLOGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- SATC's debt-to-equity ratio of 0.79 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.93 is weak.
Satcon Technology Corporation provides utility-grade power conversion solutions and system design services for the renewable energy sector, primarily for large-scale commercial and utility-scale solar photovoltaic (PV) markets. SatCon Technology has a market cap of $170.2 million and is part of the
industry. Shares are down 76.2% year to date as of the close of trading on Thursday.
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