NEW YORK ( TheStreet) -- Identive Group (Nasdaq: INVE) 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 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 234.5% when compared to the same quarter one year ago, falling from -$1.86 million to -$6.23 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 Electronic Equipment, Instruments & Components industry and the overall market, IDENTIVE GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 175.00% 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.
- 43.70% is the gross profit margin for IDENTIVE GROUP INC which we consider to be strong. Regardless of INVE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, INVE's net profit margin of -29.40% significantly underperformed when compared to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. 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