NEW YORK ( TheStreet) -- Teekay Corporation (NYSE: TK) 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, generally weak debt management, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 111.8% when compared to the same quarter one year ago, falling from -$14.00 million to -$29.66 million.
  • The debt-to-equity ratio is very high at 2.83 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, TK maintains a poor quick ratio of 0.72, which illustrates the inability to avoid short-term cash problems.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TEEKAY CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$92.67 million or 197.77% 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 share price of TEEKAY CORP has not done very well: it is down 7.63% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Teekay Corporation provides crude oil and petroleum product transportation services in Bermuda and internationally. The company has a P/E ratio of 15.5, below the S&P 500 P/E ratio of 17.7. Teekay has a market cap of $1.7 billion and is part of the services sector and transportation industry. Shares are up 5.8% year to date as of the close of trading on Wednesday.

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