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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- ZA has underperformed the S&P 500 Index, declining 13.99% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- ZUOAN FASHION LTD -ADR has improved earnings per share by 30.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, ZUOAN FASHION LTD -ADR increased its bottom line by earning $1.51 versus $0.31 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 46.5% when compared to the same quarter one year prior, rising from $7.30 million to $10.70 million.
- ZA's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.55, which clearly demonstrates the ability to cover short-term cash needs.
Zuoan Fashion Limited, through its subsidiaries, engages in the design and distribution of fashion menswear. The company has a P/E ratio of 2.5, above the average consumer non-durables industry P/E ratio of 2.3 and below the S&P 500 P/E ratio of 17.7. Zuoan Fashion has a market cap of $99.3 million and is part of the
industry. Shares are down 9.6% year to date as of the close of trading on Monday.
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-- Written by a member of TheStreet Ratings Staff