NEW YORK ( TheStreet) -- ReneSola (NYSE: SOL) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally weak debt management, poor profit margins, weak operating cash flow and disappointing return on equity. 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 113.6% when compared to the same quarter one year ago, falling from $60.11 million to -$8.15 million.
- The debt-to-equity ratio of 1.30 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, SOL has a quick ratio of 0.68, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- The gross profit margin for RENESOLA LTD is currently extremely low, coming in at 6.40%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.30% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$58.95 million or 149.65% 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 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 Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, RENESOLA LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.