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, feeble growth in its earnings per share and unimpressive growth in net income.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 52.76%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 40.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, WIFI is still more expensive than most of the other companies in its industry.
- BOINGO WIRELESS INC's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, BOINGO WIRELESS INC increased its bottom line by earning $0.19 versus $0.18 in the prior year. For the next year, the market is expecting a contraction of 71.0% in earnings ($0.06 versus $0.19).
- The change in net income from the same quarter one year ago has exceeded that of the Wireless Telecommunication Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 38.4% when compared to the same quarter one year ago, falling from $1.86 million to $1.14 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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.
- 40.30% is the gross profit margin for BOINGO WIRELESS INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.08% trails the industry average.
-- Written by a member of TheStreet Ratings Staff