NEW YORK ( TheStreet) -- Yingli Green Energy Holding Company (NYSE: YGE) 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, generally weak debt management, disappointing return on equity, poor profit margins 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 830.7% when compared to the same quarter one year ago, falling from $81.86 million to -$598.19 million.
- The debt-to-equity ratio is very high at 2.76 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, YGE has a quick ratio of 0.62, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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 Semiconductors & Semiconductor Equipment industry and the overall market, YINGLI GREEN ENERGY HLDGS CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for YINGLI GREEN ENERGY HLDGS CO is currently extremely low, coming in at 4.00%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -138.00% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 67.60%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 858.82% 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.
-- Written by a member of TheStreet Ratings Staff