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) -- Calix (NYSE: CALX) 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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- In its most recent trading session, CALX 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. 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Communications Equipment industry and the overall market, CALIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has exceeded that of the Communications Equipment industry average, but is less than that of the S&P 500. The net income increased by 1.8% when compared to the same quarter one year prior, going from -$6.57 million to -$6.45 million.
- 47.39% is the gross profit margin for CALIX INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -6.86% is in-line with the industry average.
- Net operating cash flow has increased to $4.01 million or 40.19% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 29.87%.