NEW YORK ( TheStreet) -- A-Power Energy Generation Systems (Nasdaq: APWR) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, disappointing return on equity, poor profit margins and feeble growth in its earnings per share. Highlights from the ratings report include:
- A-POWER ENERGY GENERATN SYS reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, A-POWER ENERGY GENERATN SYS swung to a loss, reporting -$0.54 versus $0.91 in the prior year.
- The gross profit margin for A-POWER ENERGY GENERATN SYS is currently extremely low, coming in at 10.30%. Regardless of APWR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, APWR's net profit margin of -1.80% significantly underperformed when compared to 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. In comparison to the other companies in the Electrical Equipment industry and the overall market, A-POWER ENERGY GENERATN SYS's return on equity is significantly below that of the industry average and is below that of 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 Electrical Equipment industry. The net income has significantly decreased by 62.0% when compared to the same quarter one year ago, falling from -$0.62 million to -$1.01 million.
- APWR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 78.52%, which is also worse than the performance of the S&P 500 Index. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.