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) -- Orion Energy Systems (AMEX: OESX) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and weak operating cash flow.
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- 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 Electrical Equipment industry. The net income has significantly decreased by 1710.0% when compared to the same quarter one year ago, falling from $0.55 million to -$8.84 million.
- The gross profit margin for ORION ENERGY SYSTEMS INC is rather low; currently it is at 19.97%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -70.23% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$0.95 million or 140.82% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electrical Equipment industry and the overall market, ORION ENERGY SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 3.1%. Since the same quarter one year prior, revenues fell by 43.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.