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) -- United States Steel Corporation (NYSE: X) has been reiterated by TheStreet Ratings as a sell with a ratings score of D+ . The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
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- The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, X maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Metals & Mining industry and the overall market, UNITED STATES STEEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 8.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.94% significantly trails the industry average.
- X has underperformed the S&P 500 Index, declining 16.37% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Despite the weak revenue results, X has outperformed against the industry average of 19.5%. Since the same quarter one year prior, revenues slightly dropped by 8.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
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