NEW YORK ( TheStreet) -- Innovative Solutions & Support (Nasdaq: ISSC) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income, disappointing return on equity and feeble growth in its earnings per share. Highlights from the ratings report include:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.35%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 200.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ISSC is still more expensive than most of the other companies in its industry.
- 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 Aerospace & Defense industry. The net income has significantly decreased by 220.3% when compared to the same quarter one year ago, falling from $0.29 million to -$0.34 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 Aerospace & Defense industry and the overall market, INNOVATIVE SOLTNS & SUPP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- INNOVATIVE SOLTNS & SUPP 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, INNOVATIVE SOLTNS & SUPP INC increased its bottom line by earning $0.05 versus $0.04 in the prior year. For the next year, the market is expecting a contraction of 60.0% in earnings ($0.02 versus $0.05).
- ISSC, with its decline in revenue, underperformed when compared the industry average of 2.1%. Since the same quarter one year prior, revenues fell by 27.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
-- Written by a member of TheStreet Ratings Staff