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) -- Planet Payment (Nasdaq: PLPM) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
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- PLPM has underperformed the S&P 500 Index, declining 21.63% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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 IT Services industry and the overall market, PLANET PAYMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 45.81% is the gross profit margin for PLANET PAYMENT INC which we consider to be strong. Regardless of PLPM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PLPM's net profit margin of -7.72% significantly underperformed when compared to the industry average.
- PLANET PAYMENT INC 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PLANET PAYMENT INC swung to a loss, reporting -$0.10 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($0.04 versus -$0.10).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 79.6% when compared to the same quarter one year prior, rising from -$3.96 million to -$0.81 million.