NEW YORK ( TheStreet) -- National American University Holdings (Nasdaq: NAUH) 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, weak operating cash flow 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 39.74%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 85.71% 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, NAUH 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 Diversified Consumer Services industry. The net income has significantly decreased by 86.6% when compared to the same quarter one year ago, falling from $3.87 million to $0.52 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Diversified Consumer Services industry and the overall market, NATIONAL AMERN UNIV HLDG INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has decreased to $4.08 million or 44.66% when compared to the same quarter last year. Despite a decrease in cash flow NATIONAL AMERN UNIV HLDG INC is still fairing well by exceeding its industry average cash flow growth rate of -83.89%.
- NATIONAL AMERN UNIV HLDG 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 reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NATIONAL AMERN UNIV HLDG INC increased its bottom line by earning $0.38 versus $0.36 in the prior year. For the next year, the market is expecting a contraction of 52.6% in earnings ($0.18 versus $0.38).
-- Written by a member of TheStreet Ratings Staff