NEW YORK ( TheStreet) -- GenMark Diagnostics (Nasdaq: GNMK) 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 and weak operating cash flow. 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 against the S&P 500 and did not exceed that of the Health Care Equipment & Supplies industry. The net income has decreased by 8.6% when compared to the same quarter one year ago, dropping from -$5.14 million to -$5.58 million.
- Net operating cash flow has decreased to -$4.90 million or 18.80% when compared to the same quarter last year. Despite a decrease in cash flow of 18.80%, GENMARK DIAGNOSTICS INC is in line with the industry average cash flow growth rate of -22.28%.
- GENMARK DIAGNOSTICS INC has improved earnings per share by 11.4% in the most recent quarter compared to the same quarter a year ago. For the next year, the market is expecting a contraction of 8.3% in earnings (-$1.70 versus -$1.57).
- After a year of stock price fluctuations, the net result is that GNMK's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, GENMARK DIAGNOSTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.