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) -- Boingo Wireless (Nasdaq: WIFI) 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, poor profit margins and feeble growth in its earnings per share.
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- 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 87.3% when compared to the same quarter one year ago, falling from $2.78 million to $0.35 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 Wireless Telecommunication Services industry and the overall market, BOINGO WIRELESS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for BOINGO WIRELESS INC is currently lower than what is desirable, coming in at 34.61%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 1.23% significantly trails the industry average.
- BOINGO WIRELESS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, BOINGO WIRELESS INC increased its bottom line by earning $0.19 versus $0.18 in the prior year. For the next year, the market is expecting a contraction of 100.0% in earnings ($0.00 versus $0.19).
- Compared to where it was trading one year ago, WIFI is down 7.80% to its most recent closing price of 6.39. Looking ahead, our view is that this stock still does not have good upside potential and may even suffer further declines.