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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- TII NETWORK TECHNOLOGIES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, TII NETWORK TECHNOLOGIES INC swung to a loss, reporting -$0.23 versus $0.15 in the prior year.
- 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 Communications Equipment industry. The net income has significantly decreased by 836.3% when compared to the same quarter one year ago, falling from $0.76 million to -$5.60 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, TII NETWORK TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for TII NETWORK TECHNOLOGIES INC is rather low; currently it is at 16.20%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -42.60% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 49.13%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 900.00% 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.
Tii Network Technologies, Inc., together with its subsidiaries, designs, manufactures, and sells products for use in the networks of service providers in the communications industry in the United States. The company has a P/E ratio of 7.1, below the S&P 500 P/E ratio of 17.7. TII Network has a market cap of $22.4 million and is part of the
industry. Shares are up 12.2% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff