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) -- Casella Waste Systems (Nasdaq: CWST) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins.
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- The debt-to-equity ratio is very high at 79.80 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- The gross profit margin for CASELLA WASTE SYS INC is currently lower than what is desirable, coming in at 28.41%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.12% trails that of the industry average.
- 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 Commercial Services & Supplies industry and the overall market, CASELLA WASTE SYS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- CASELLA WASTE SYS INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CASELLA WASTE SYS INC continued to lose money by earning -$1.50 versus -$2.90 in the prior year. This year, the market expects an improvement in earnings (-$0.34 versus -$1.50).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Commercial Services & Supplies industry average, but is less than that of the S&P 500. The net income increased by 5.8% when compared to the same quarter one year prior, going from -$11.41 million to -$10.75 million.