Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Orion Energy Systems (AMEX: OESX) 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 feeble growth in its earnings per share.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
- 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 Electrical Equipment industry. The net income has significantly decreased by 144.9% when compared to the same quarter one year ago, falling from -$0.79 million to -$1.94 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, ORION ENERGY SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ORION ENERGY SYSTEMS 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, ORION ENERGY SYSTEMS INC increased its bottom line by earning $0.02 versus $0.01 in the prior year. For the next year, the market is expecting a contraction of 250.0% in earnings (-$0.03 versus $0.02).
- OESX, with its decline in revenue, slightly underperformed the industry average of 11.2%. Since the same quarter one year prior, revenues fell by 16.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- 35.70% is the gross profit margin for ORION ENERGY SYSTEMS INC which we consider to be strong. Regardless of OESX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OESX's net profit margin of -12.70% significantly underperformed when compared to the industry average.
-- Written by a member of TheStreet Ratings Staff