Editor's Note: 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
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 unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.
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Highlights from the ratings report include:
- 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 Energy Equipment & Services industry. The net income has significantly decreased by 61.9% when compared to the same quarter one year ago, falling from $30.37 million to $11.57 million.
- Net operating cash flow has significantly decreased to $3.59 million or 87.84% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TETRA TECHNOLOGIES INC/DE has marginally lower results.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.89%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 61.53% compared to the year-earlier 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 gross profit margin for TETRA TECHNOLOGIES INC/DE is currently lower than what is desirable, coming in at 30.80%. Regardless of TTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.90% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, TETRA TECHNOLOGIES INC/DE's return on equity significantly trails that of both the industry average and the S&P 500.
TETRA Technologies, Inc. operates as a diversified oil and gas services company. The company operates in three divisions: Fluids, Production Enhancement, and Offshore. Tetra has a market cap of $462 million and is part of the basic materials sector and energy industry. Shares are down 38.2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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