NEW YORK (TheStreet) -- Novadeq Technologies (NVDQ) was falling -15.2% to $14 Wednesday after missing analysts' estimates for earnings in the second quarter.

For the second quarter Novadeq reported a loss of -8 cents a share, missing the Capital IQ Consensus Estimate of -5 cents a share by 3 cents. Revenue grew 41.5% to $10.3 million in the quarter, compared to analysts' expectations of $10.33 million.

"NOVADAQ's performance is increasingly being driven by our direct products, PINPOINT and LUNA as more of our early evaluation sites are becoming commercial customers," president and CEO Dr. Arun Menawat said in a press release. "With last month's introduction of the newest generation PINPOINT at SAGES, our sales team is now able to offer a system that supports all of our surgeon's traditional laparoscopic needs in addition to providing PINPOINT fluorescence imaging of critical physiologic processes and anatomical structures."

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TheStreet Ratings team rates NOVADAQ TECHNOLOGIES INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NOVADAQ TECHNOLOGIES INC (NVDQ) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NOVADAQ TECHNOLOGIES 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, NOVADAQ TECHNOLOGIES INC reported poor results of -$0.47 versus -$0.34 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 187.8% when compared to the same quarter one year ago, falling from $3.09 million to -$2.72 million.
  • Net operating cash flow has significantly decreased to -$2.42 million or 402.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Health Care Equipment & Supplies industry and the overall market, NOVADAQ TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for NOVADAQ TECHNOLOGIES INC is currently very high, coming in at 72.61%. Regardless of NVDQ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NVDQ's net profit margin of -25.26% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: NVDQ Ratings Report

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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.