NEW YORK (TheStreet) -- Shares of China Green Agriculture Inc. (CGA - Get Report) are down -8.45% to $2.60 on Monday after the company reported a decline in net income to $7.2 million, or 23 cents per share, for the 2014 third quarter, compared to $13.4 million, or 48 cents per share, from the year ago quarter.
The company, which researches, develops and sells various types of fertilizer and agricultural products, said net sales for the most recent quarter increased 6.7% to $70.3 million versus $65.9 million from the 2013 third quarter.
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TheStreet Ratings team rates CHINA GREEN AGRICULTURE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHINA GREEN AGRICULTURE INC (CGA) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CGA's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CGA has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has slightly increased to $4.70 million or 1.73% when compared to the same quarter last year. Despite an increase in cash flow, CHINA GREEN AGRICULTURE INC's cash flow growth rate is still lower than the industry average growth rate of 20.88%.
- 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 Chemicals industry. The net income has significantly decreased by 55.4% when compared to the same quarter one year ago, falling from $8.24 million to $3.68 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Chemicals industry and the overall market, CHINA GREEN AGRICULTURE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: CGA Ratings Report