NEW YORK ( TheStreet) -- American Woodmark Corporation (Nasdaq: AMWD) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Building Products industry and the overall market, AMERICAN WOODMARK CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for AMERICAN WOODMARK CORP is currently extremely low, coming in at 14.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.10% trails that of the industry average.
- In its most recent trading session, AMWD 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. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- AMERICAN WOODMARK CORP has improved earnings per share by 20.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMERICAN WOODMARK CORP continued to lose money by earning -$1.41 versus -$1.57 in the prior year. This year, the market expects an improvement in earnings (-$0.71 versus -$1.41).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Building Products industry average, but is less than that of the S&P 500. The net income increased by 20.5% when compared to the same quarter one year prior, going from -$3.42 million to -$2.72 million.