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) -- Stanley Furniture Company (Nasdaq: STLY) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and poor profit margins.
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- 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 Household Durables industry average. The net income has decreased by 12.7% when compared to the same quarter one year ago, dropping from -$1.69 million to -$1.91 million.
- The gross profit margin for STANLEY FURNITURE CO INC is rather low; currently it is at 15.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -7.90% is significantly below that of the industry average.
- STANLEY FURNITURE CO INC's earnings per share declined by 8.3% in the most recent quarter compared to the same quarter a year ago. 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, STANLEY FURNITURE CO INC continued to lose money by earning -$0.35 versus -$4.17 in the prior year. This year, the market expects earnings to be in line with last year (-$0.35 versus -$0.35).
- Despite the weak revenue results, STLY has outperformed against the industry average of 28.8%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Net operating cash flow has significantly increased by 56.65% to -$1.18 million when compared to the same quarter last year. Despite an increase in cash flow of 56.65%, STANLEY FURNITURE CO INC is still growing at a significantly lower rate than the industry average of 143.15%.
-- Written by a member of TheStreet Ratings Staff