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NEW YORK ( TheStreet) -- Radio One (Nasdaq: ROIAK) 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, generally high debt management risk and disappointing return on equity.

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Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Media industry. The net income has significantly decreased by 39.1% when compared to the same quarter one year ago, falling from -$18.11 million to -$25.18 million.
  • The debt-to-equity ratio is very high at 15.39 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • 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 Media industry and the overall market, RADIO ONE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RADIO ONE INC is rather high; currently it is at 68.20%. Regardless of ROIAK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ROIAK's net profit margin of -22.67% significantly underperformed when compared to the industry average.
  • RADIO ONE INC's earnings per share declined by 39.5% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, RADIO ONE INC continued to lose money by earning -$1.30 versus -$1.33 in the prior year.

Radio One, Inc., together with its subsidiaries, operates as an urban-oriented multi-media company in the United States. The company operates through four segments: Radio Broadcasting, Reach Media, Internet, and Cable Television. Radio One has a market cap of $155.1 million and is part of the services sector and media industry. Shares are down 1.1% year to date as of the close of trading on Monday.

You can view the full Radio One Ratings Report or get investment ideas from our investment research center.

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