Gentiva Health Services Inc. Stock Downgraded (GTIV)

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) -- Gentiva Health Services (Nasdaq: GTIV) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity and generally high debt management risk.

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Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Health Care Providers & Services industry. The net income has significantly decreased by 4380.5% when compared to the same quarter one year ago, falling from $4.84 million to -$207.18 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Health Care Providers & Services industry and the overall market, GENTIVA HEALTH SERVICES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 30.70 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, GTIV has managed to keep a strong quick ratio of 1.76, which demonstrates the ability to cover short-term cash needs.
  • GTIV, with its decline in revenue, underperformed when compared the industry average of 13.3%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • GENTIVA HEALTH SERVICES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENTIVA HEALTH SERVICES INC turned its bottom line around by earning $0.88 versus -$15.14 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.88).
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Gentiva Health Services, Inc. provides home health services and hospice services in the United States. The company operates in two segments, Home Health and Hospice. The Home Health segment provides direct home nursing and therapy services, including specialty programs. The company has a P/E ratio of 12.6, below the S&P 500 P/E ratio of 17.7. Gentiva Health Services has a market cap of $338 million and is part of the health care sector and health services industry. Shares are up 8.9% year to date as of the close of trading on Friday.

You can view the full Gentiva Health Services Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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