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 disappointing historical performance in the stock itself, generally high debt management risk, poor profit margins, weak operating cash flow and feeble growth in its earnings per share.
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- X's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 27.96%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The debt-to-equity ratio of 1.13 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 0.98, which illustrates the inability to avoid short-term cash problems.
- The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 7.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.58% trails that of the industry average.
- Net operating cash flow has decreased to $233.00 million or 45.30% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- UNITED STATES STEEL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, UNITED STATES STEEL CORP reported poor results of -$0.97 versus -$0.59 in the prior year. For the next year, the market is expecting a contraction of 39.2% in earnings (-$1.35 versus -$0.97).
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