NEW YORK ( TheStreet) -- NuVasive (Nasdaq: NUVA) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 890.8% when compared to the same quarter one year ago, falling from $8.54 million to -$67.55 million.
  • 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 Health Care Equipment & Supplies industry and the overall market, NUVASIVE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 59.22%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 904.76% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • NUVASIVE INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NUVASIVE INC increased its bottom line by earning $1.80 versus $0.14 in the prior year. For the next year, the market is expecting a contraction of 42.8% in earnings ($1.03 versus $1.80).
  • The gross profit margin for NUVASIVE INC is currently very high, coming in at 86.00%. Regardless of NUVA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NUVA's net profit margin of -50.80% significantly underperformed when compared to the industry average.

NuVasive, Inc., a medical device company, engages in the design, development, and marketing of minimally disruptive surgical products and procedures for the spine. Its products are used in applications for spine fusion surgery. The company has a P/E ratio of 9.2, equal to the average health services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. NuVasive has a market cap of $681.8 million and is part of the health care sector and health services industry. Shares are down 30.6% year to date as of the close of trading on Monday.

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