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) -- Ambient Corporation (Nasdaq: AMBT) 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, weak operating cash flow and feeble growth in its earnings per share.
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- 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 Communications Equipment industry. The net income has significantly decreased by 132.7% when compared to the same quarter one year ago, falling from $3.50 million to -$1.14 million.
- Net operating cash flow has significantly decreased to -$2.09 million or 153.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- AMBIENT CORP's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. 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, AMBIENT CORP increased its bottom line by earning $0.39 versus $0.00 in the prior year. For the next year, the market is expecting a contraction of 166.7% in earnings (-$0.26 versus $0.39).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, AMBIENT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 14.1%. Since the same quarter one year prior, revenues fell by 37.4%. 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