ION Geophysical Corporation Stock Downgraded (IO)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- ION Geophysical Corporation (NYSE: IO) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

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 Energy Equipment & Services industry. The net income has significantly decreased by 672.0% when compared to the same quarter one year ago, falling from $12.38 million to -$70.80 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 Energy Equipment & Services industry and the overall market, ION GEOPHYSICAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$6.00 million or 117.69% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of ION GEOPHYSICAL CORP has not done very well: it is down 9.02% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 48.63% is the gross profit margin for ION GEOPHYSICAL CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, IO's net profit margin of -58.55% significantly underperformed when compared to the industry average.

ION Geophysical Corporation provides planning and seismic processing services, software, and acquisition equipment to the energy industry worldwide. ION Geophysical has a market cap of $997.6 million and is part of the technology sector and electronics industry. Shares are down 2.3% year to date as of the close of trading on Friday.

You can view the full ION Geophysical Ratings Report or get investment ideas from our investment research center.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more..
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

Insider Trading Alert - TLMR, CRTO And IO Traded By Insiders

Insider Trading Alert - AVB, IO And GRUB Traded By Insiders

Insider Trading Alert - WVVI, EWBC And IO Traded By Insiders

5 Stocks Under $10 Setting Up to Trade Higher: Covisint and More

Strong On High Relative Volume: ION Geophysical (IO)