NEW YORK ( TheStreet) -- Commercial Vehicle Group (Nasdaq: CVGI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income, weak operating cash flow, generally weak debt management and poor profit margins. Highlights from the ratings report include:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 26.55%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 500.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- 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 Machinery industry. The net income has significantly decreased by 413.0% when compared to the same quarter one year ago, falling from $0.69 million to -$2.17 million.
- Net operating cash flow has significantly decreased to $0.67 million or 97.73% 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 debt-to-equity ratio is very high at 48.90 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, CVGI has managed to keep a strong quick ratio of 1.93, which demonstrates the ability to cover short-term cash needs.
- The gross profit margin for COMMERCIAL VEHICLE GROUP INC is currently extremely low, coming in at 14.90%. Regardless of CVGI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.00% trails the industry average.