NEW YORK ( TheStreet) -- Gentiva Health Services (Nasdaq: GTIV) 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, weak operating cash flow, generally weak debt management and generally disappointing historical performance in the stock itself.

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 Providers & Services industry. The net income has significantly decreased by 5954.6% when compared to the same quarter one year ago, falling from $8.09 million to -$473.75 million.
  • 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, GENTIVA HEALTH 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 -$5.53 million or 112.66% 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 5.16 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, GTIV has managed to keep a strong quick ratio of 1.56, which demonstrates the ability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 83.74%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 5959.25% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

Gentiva Health Services, Inc. provides home health services and hospice care in the United States. The company has a P/E ratio of 2.7, below the average health services industry P/E ratio of 2.8 and below the S&P 500 P/E ratio of 17.7. Gentiva Health Services has a market cap of $121.8 million and is part of the health care sector and health services industry. Shares are down 85.3% year to date as of the close of trading on Friday.

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