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) -- Boingo Wireless (Nasdaq: WIFI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.
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- WIFI has underperformed the S&P 500 Index, declining 17.24% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- Net operating cash flow has significantly decreased to $3.42 million or 66.05% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- In comparison to the other companies in the Wireless Telecommunication Services industry and the overall market, BOINGO WIRELESS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for BOINGO WIRELESS INC is rather high; currently it is at 61.70%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.70% trails the industry average.
- WIFI's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.14, which clearly demonstrates the ability to cover short-term cash needs.
-- Written by a member of TheStreet Ratings Staff