NEW YORK ( TheStreet) -- Affymetrix (Nasdaq: AFFX) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been the stock's relatively poor performance when compared with the S&P 500 during the past year. Highlights from the ratings report include:
- AFFX, with its decline in revenue, underperformed when compared the industry average of 11.5%. Since the same quarter one year prior, revenues slightly dropped by 9.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for AFFYMETRIX INC is rather high; currently it is at 60.10%. Regardless of AFFX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AFFX's net profit margin of -5.70% significantly underperformed when compared to the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, AFFYMETRIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Life Sciences Tools & Services industry average, but is greater than that of the S&P 500. The net income increased by 33.7% when compared to the same quarter one year prior, rising from -$5.54 million to -$3.67 million.
- In its most recent trading session, AFFX 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. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.