NEW YORK ( TheStreet) -- Net one Ueps Technologies (Nasdaq: UEPS) 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, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • NET one UEPS 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NET one UEPS TECHNOLOGIES INC reported lower earnings of $0.82 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($1.52 versus $0.82).
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 44.78%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 214.63% 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.
  • Net operating cash flow has declined marginally to $31.35 million or 1.12% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NET one UEPS TECHNOLOGIES INC has marginally lower results.
  • 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 Software industry and the overall market, NET one UEPS 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 Software industry. The net income has significantly decreased by 214.9% when compared to the same quarter one year ago, falling from $18.77 million to -$21.56 million.

Net one UEPS Technologies, Inc. provides universal electronic payment system (UEPS) as an alternative payment system for the unbanked and under-banked populations in South Africa. Net one Ueps has a market cap of $371.1 million and is part of the services sector and diversified services industry. Shares are down 32.3% year to date as of the close of trading on Wednesday.

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