NEW YORK ( TheStreet) -- Palomar Medical Technologies (Nasdaq: PMTI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • PALOMAR MED 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PALOMAR MED TECHNOLOGIES INC continued to lose money by earning -$0.48 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings (-$0.35 versus -$0.48).
  • The gross profit margin for PALOMAR MED TECHNOLOGIES INC is rather high; currently it is at 60.60%. Regardless of PMTI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PMTI's net profit margin of -24.60% significantly underperformed when compared to the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, PALOMAR MED TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, PMTI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 135.9% when compared to the same quarter one year ago, falling from -$1.70 million to -$4.00 million.

Palomar Medical Technologies, Inc., together with its subsidiaries, designs, manufactures, markets, and sells lasers and other light-based products, and related disposable items and accessories for use in dermatology and cosmetic procedures. Palomar Medical has a market cap of $193.1 million and is part of the health care sector and health services industry. Shares are down 30.8% year to date as of the close of trading on Friday.

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

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