NEW YORK ( TheStreet) -- OCZ Technology Group (Nasdaq: OCZ) 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, weak operating cash flow, poor profit margins and feeble growth in its earnings per share. Highlights from the ratings report include:
- 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 Computers & Peripherals industry. The net income has significantly decreased by 87.6% when compared to the same quarter one year ago, falling from -$4.85 million to -$9.09 million.
- Net operating cash flow has significantly decreased to -$22.64 million or 118.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for OCZ TECHNOLOGY GROUP INC is rather low; currently it is at 20.60%. Regardless of OCZ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OCZ's net profit margin of -12.30% significantly underperformed when compared to the industry average.
- OCZ TECHNOLOGY GROUP INC's earnings per share declined by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, OCZ TECHNOLOGY GROUP INC reported poor results of -$1.04 versus -$0.31 in the prior year. This year, the market expects an improvement in earnings ($0.19 versus -$1.04).
- Compared to other companies in the Computers & Peripherals industry and the overall market, OCZ TECHNOLOGY GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.