NEW YORK ( TheStreet) -- GenMark Diagnostics (Nasdaq: GNMK) 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, weak operating cash flow and poor profit margins. 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 28.4% when compared to the same quarter one year ago, falling from -$4.92 million to -$6.31 million.
- Net operating cash flow has decreased to -$6.02 million or 34.25% 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 gross profit margin for GENMARK DIAGNOSTICS INC is rather low; currently it is at 21.10%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, GNMK's net profit margin of -479.60% significantly underperformed when compared to the industry average.
- Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, GENMARK DIAGNOSTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- GNMK's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.72, which clearly demonstrates the ability to cover short-term cash needs.