NEW YORK ( TheStreet) -- DynaVox (Nasdaq: DVOX) 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, deteriorating net income, weak operating cash flow, generally weak debt management and feeble growth in its earnings per share. 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 55.67%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, DVOX is still more expensive than most of the 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 49.1% when compared to the same quarter one year ago, falling from $1.83 million to $0.93 million.
- Net operating cash flow has decreased to $8.18 million or 11.73% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The debt-to-equity ratio of 1.40 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, DVOX has managed to keep a strong quick ratio of 1.93, which demonstrates the ability to cover short-term cash needs.
- DYNAVOX INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DYNAVOX INC reported lower earnings of $0.14 versus $0.51 in the prior year. This year, the market expects an improvement in earnings ($0.29 versus $0.14).