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NEW YORK (TheStreet) -- Shares of LDR Holding Corp. (LDRH) were falling 26.3% to $26.70 on Friday after the medical devices company announced preliminary revenue results for the third quarter.

LDR said it expects to report revenue of about $39.3 million for the third quarter, which represents a 9.5% increase over the year-ago quarter. Analysts expects the company to report revenue of $40.21 million for the third quarter.

The company said revenue from exclusive technology products grew 14.5% year over year to about $36.7 million for the third quarter.

"I am pleased with the growth from our exclusive technology products during the third quarter of 2015, which grew 18% on a constant currency basis," LDR President and CEO Christophe Lavigne said in a statement. "We continue to execute on our exclusive technology strategy, with 93.5% of total revenue in the third quarter of 2015 generated by our cervical and lumbar exclusive technology products compared to 89.4% in the third quarter of 2014."

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About 3.5 million shares of LDR were traded by 12:25 p.m. Friday, above the company's average trading volume of about 278,000 shares a day.

TheStreet Ratings team rates LDR HOLDING CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate LDR HOLDING CORP (LDRH) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 150.2% when compared to the same quarter one year ago, falling from -$2.33 million to -$5.83 million.
  • Net operating cash flow has significantly decreased to -$2.17 million or 480.87% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LDR HOLDING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LDR HOLDING CORP continued to lose money by earning -$0.44 versus -$0.98 in the prior year. For the next year, the market is expecting a contraction of 58.0% in earnings (-$0.70 versus -$0.44).
  • 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 Health Care Equipment & Supplies industry and the overall market, LDR HOLDING CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • You can view the full analysis from the report here: LDRH