NEW YORK ( TheStreet) -- World Energy Solutions (Nasdaq: XWES) 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 and unimpressive growth in net income. Highlights from the ratings report include:
- The share price of WORLD ENERGY SOLUTIONS INC has not done very well: it is down 10.32% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others 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 Internet Software & Services industry. The net income has significantly decreased by 304.4% when compared to the same quarter one year ago, falling from $0.38 million to -$0.78 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, WORLD ENERGY SOLUTIONS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- WORLD ENERGY SOLUTIONS 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. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, WORLD ENERGY SOLUTIONS INC turned its bottom line around by earning $0.06 versus -$0.01 in the prior year.
- Although XWES's debt-to-equity ratio of 0.14 is very low, it is currently higher than that of the industry average. Despite the fact that XWES's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
-- Written by a member of TheStreet Ratings Staff