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) -- Annie's (NYSE: BNNY) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its premium valuation, weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year.
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- Net operating cash flow has significantly decreased to -$8.97 million or 77.82% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, BNNY has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- 39.59% is the gross profit margin for ANNIE'S INC which we consider to be strong. Regardless of BNNY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.05% trails the industry average.
- BNNY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, BNNY has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.