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) -- GenMark Diagnostics (Nasdaq: GNMK) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been weak operating cash flow.
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- Net operating cash flow has decreased to -$6.10 million or 11.06% when compared to the same quarter last year. Despite a decrease in cash flow GENMARK DIAGNOSTICS INC is still fairing well by exceeding its industry average cash flow growth rate of -32.97%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, GENMARK DIAGNOSTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for GENMARK DIAGNOSTICS INC is rather high; currently it is at 59.00%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -37.60% is in-line with the industry average.
- GNMK's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.18, which clearly demonstrates the ability to cover short-term cash needs.
- This stock has increased by 221.83% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in GNMK do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
-- Written by a member of TheStreet Ratings Staff