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) -- Ameresco Inc. Class A (NYSE: AMRC) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
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- The share price of AMERESCO INC has not done very well: it is down 6.16% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- 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 Construction & Engineering industry. The net income has significantly decreased by 69.1% when compared to the same quarter one year ago, falling from $5.09 million to $1.57 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Construction & Engineering industry and the overall market, AMERESCO INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for AMERESCO INC is rather low; currently it is at 18.04%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.89% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$45.50 million or 201.16% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.