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) -- Gilat Satellite Networks (Nasdaq: GILT) 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 feeble growth in its earnings per share.
- 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.
- 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 Communications Equipment industry. The net income has significantly decreased by 567.8% when compared to the same quarter one year ago, falling from $0.85 million to -$3.98 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Communications Equipment industry and the overall market, GILAT SATELLITE NETWORKS LTD'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 -$0.53 million or 116.23% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- GILAT SATELLITE NETWORKS LTD 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GILAT SATELLITE NETWORKS LTD reported poor results of -$0.55 versus -$0.15 in the prior year. This year, the market expects an improvement in earnings (-$0.10 versus -$0.55).
- The revenue fell significantly faster than the industry average of 28.1%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.