NEW YORK ( TheStreet) -- Kid Brands (NYSE: KID) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. Highlights from the ratings report include:
- The gross profit margin for KID BRANDS INC is currently lower than what is desirable, coming in at 30.20%. It has decreased from the same quarter the previous year.
- Net operating cash flow has decreased to $7.94 million or 10.66% when compared to the same quarter last year. Despite a decrease in cash flow of 10.66%, KID BRANDS INC is still significantly exceeding the industry average of -61.15%.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 59.71%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 190.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- KID BRANDS 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KID BRANDS INC increased its bottom line by earning $1.58 versus $0.54 in the prior year. For the next year, the market is expecting a contraction of 73.4% in earnings ($0.42 versus $1.58).
- The change in net income from the same quarter one year ago has significantly exceeded that of the Household Durables industry average, but is less than that of the S&P 500. The net income has significantly decreased by 188.5% when compared to the same quarter one year ago, falling from $4.48 million to -$3.96 million.