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) -- InfoSonics (Nasdaq: IFON) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been poor profit margins.
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- The gross profit margin for INFOSONICS CORP is rather low; currently it is at 18.25%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.47% significantly trails the industry average.
- 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 Communications Equipment industry and the overall market, INFOSONICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- This stock has increased by 307.40% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- INFOSONICS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, INFOSONICS CORP continued to lose money by earning -$0.04 versus -$0.17 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 107.8% when compared to the same quarter one year prior, rising from -$0.71 million to $0.06 million.