NEW YORK ( TheStreet) -- Hill International (NYSE: HIL) 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, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Professional Services industry average. The net income has decreased by 20.4% when compared to the same quarter one year ago, dropping from -$5.60 million to -$6.74 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. Compared to other companies in the Professional Services industry and the overall market, HILL INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Looking at the price performance of HIL's shares over the past 12 months, there is not much good news to report: the stock is down 33.05%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- HILL INTERNATIONAL INC's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, HILL INTERNATIONAL INC swung to a loss, reporting -$0.16 versus $0.36 in the prior year. This year, the market expects an improvement in earnings (-$0.11 versus -$0.16).
- HIL's debt-to-equity ratio of 0.65 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.15 is sturdy.
-- Written by a member of TheStreet Ratings Staff