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) -- Affymetrix (Nasdaq: AFFX) 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 $1.75 million or 69.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- AFFX has underperformed the S&P 500 Index, declining 21.19% 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.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, AFFYMETRIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- AFFX's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.19 is sturdy.
- The gross profit margin for AFFYMETRIX INC is currently very high, coming in at 71.70%. 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 -14.54% is in-line with the industry average.
-- Written by a member of TheStreet Ratings Staff