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) -- Fortuna Silver Mines (NYSE: FSM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.
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- FORTUNA SILVER MINES 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, FORTUNA SILVER MINES INC swung to a loss, reporting -$0.15 versus $0.25 in the prior year.
- 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 Metals & Mining industry. The net income has significantly decreased by 276.2% when compared to the same quarter one year ago, falling from $8.47 million to -$14.93 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, FORTUNA SILVER MINES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for FORTUNA SILVER MINES INC is currently extremely low, coming in at 2.63%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -41.04% is significantly below that of the industry average.
- Net operating cash flow has declined marginally to $16.77 million or 4.48% when compared to the same quarter last year. Despite a decrease in cash flow FORTUNA SILVER MINES INC is still fairing well by exceeding its industry average cash flow growth rate of -37.78%.