NEW YORK ( TheStreet) -- AMN Healthcare Services (NYSE: AHS) 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, weak operating cash flow, generally weak debt management and poor profit margins. Highlights from the ratings report include:
- 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 Health Care Providers & Services industry and the overall market, AMN HEALTHCARE SERVICES INC'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 $2.35 million or 64.03% 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 of 1.19 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, AHS's quick ratio is somewhat strong at 1.29, demonstrating the ability to handle short-term liquidity needs.
- The gross profit margin for AMN HEALTHCARE SERVICES INC is currently lower than what is desirable, coming in at 27.70%. Regardless of AHS'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 0.30% trails the industry average.
- This stock has managed to rise its share value by 14.97% over the past twelve months. 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.