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) -- MoneyGram International (NYSE: MGI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
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- Net operating cash flow has significantly decreased to -$74.36 million or 229.30% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, MGI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- The gross profit margin for MONEYGRAM INTERNATIONAL INC is rather high; currently it is at 60.90%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MGI's net profit margin of 5.71% significantly trails the industry average.
- MONEYGRAM INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MONEYGRAM INTERNATIONAL INC continued to lose money by earning -$0.70 versus -$12.52 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus -$0.70).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 548.3% when compared to the same quarter one year prior, rising from $3.12 million to $20.25 million.
-- Written by a member of TheStreet Ratings Staff