NEW YORK ( TheStreet) -- GTSI Corporation (Nasdaq: GTSI) 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:
  • The share price of GTSI CORP has not done very well: it is down 19.64% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • The gross profit margin for GTSI CORP is currently extremely low, coming in at 10.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.50% trails that of the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, GTSI CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 117.8% when compared to the same quarter one year ago, falling from $5.83 million to -$1.04 million.
  • GTSI CORP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, GTSI CORP swung to a loss, reporting -$0.10 versus $0.57 in the prior year. For the next year, the market is expecting a contraction of 290.0% in earnings (-$0.39 versus -$0.10).

GTSI Corp. engages in selling information technology (IT) products and solutions to departments and agencies of the U.S. federal government, as well as to state and local governments, and prime contractors. The company has a P/E ratio of 7.5, equal to the average wholesale industry P/E ratio and below the S&P 500 P/E ratio of 17.2. GTSI has a market cap of $43.9 million and is part of the services sector and wholesale industry. Shares are down 6.2% year to date as of the close of trading on Friday.

You can view the full GTSI Ratings Report or get investment ideas from our investment research center.
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