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) -- Crimson Exploration (Nasdaq: CXPO) 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, generally high debt management risk and weak operating cash flow.
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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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 829.6% when compared to the same quarter one year ago, falling from $0.53 million to -$3.85 million.
- The debt-to-equity ratio of 1.44 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash needs.
- Net operating cash flow has significantly decreased to $1.13 million or 94.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CRIMSON EXPLORATION INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for CRIMSON EXPLORATION INC is currently very high, coming in at 83.40%. Regardless of CXPO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CXPO's net profit margin of -12.50% significantly underperformed when compared to the industry average.
-- Written by a member of TheStreet Ratings Staff