NEW YORK ( TheStreet) -- eMagin Corporation (AMEX: EMAN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its premium valuation and weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$0.33 million or 114.33% 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 revenue fell significantly faster than the industry average of 20.6%. Since the same quarter one year prior, revenues fell by 10.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • This stock has managed to rise its share value by 7.89% over the past twelve months. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • EMAGIN CORP has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EMAGIN CORP reported poor results of -$0.29 versus -$0.18 in the prior year. This year, the market expects an improvement in earnings ($0.13 versus -$0.29).

eMagin Corporation manufactures microdisplays using organic light emitting diode technology (OLED). It designs, develops, manufactures, and markets OLED on silicon microdisplays; virtual imaging products, which utilize OLED microdisplays; and related products. The company has a P/E ratio of 10.2, above the average electronics industry P/E ratio of 8.8 and below the S&P 500 P/E ratio of 17.7. eMagin has a market cap of $92.5 million and is part of the technology sector and electronics industry. Shares are down 31.7% year to date as of the close of trading on Friday.

You can view the full eMagin Ratings Report or get investment ideas from our investment research center.
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