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 has underperformed the S&P 500 Index, declining 13.64% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others 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 the cash generation rate to the industry average, the firm's growth is significantly 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 49.5% in earnings (-$1.45 versus -$0.97).
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