NEW YORK ( TheStreet) -- Lionbridge Technologies (Nasdaq: LIOX) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its 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:
  • LIOX, with its decline in revenue, underperformed when compared the industry average of 14.7%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The share price of LIONBRIDGE TECHNOLOGIES INC has not done very well: it is down 22.37% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for LIONBRIDGE TECHNOLOGIES INC is currently lower than what is desirable, coming in at 28.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.50% is significantly below that of the industry average.
  • 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 IT Services industry and the overall market, LIONBRIDGE TECHNOLOGIES INC'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 IT Services industry. The net income has significantly decreased by 1241.7% when compared to the same quarter one year ago, falling from $0.48 million to -$5.45 million.

Lionbridge Technologies, Inc. provides language, development, and testing services. Lionbridge has a market cap of $197.5 million and is part of the technology sector and internet industry. Shares are down 2.2% year to date as of the previous trading day's close.

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