NEW YORK ( TheStreet) -- Rimage Corporation (Nasdaq: RIMG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.
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- RIMAGE CORP 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, RIMAGE CORP reported lower earnings of $0.31 versus $0.80 in the prior year. For the next year, the market is expecting a contraction of 188.7% in earnings (-$0.28 versus $0.31).
- 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 Computers & Peripherals industry. The net income has significantly decreased by 328.0% when compared to the same quarter one year ago, falling from $1.21 million to -$2.75 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 Computers & Peripherals industry and the overall market, RIMAGE CORP'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 52.03%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 325.00% compared to 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.
- 43.90% is the gross profit margin for RIMAGE CORP which we consider to be strong. Regardless of RIMG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RIMG's net profit margin of -15.00% significantly underperformed when compared to the industry average.
-- Written by a member of TheStreet Ratings Staff