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) -- eLong (Nasdaq: LONG) 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, disappointing return on equity and feeble growth in its earnings per share.
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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 Internet & Catalog Retail industry. The net income has significantly decreased by 923.1% when compared to the same quarter one year ago, falling from $0.91 million to -$7.49 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, ELONG INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ELONG 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 reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ELONG INC reported poor results of -$0.80 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.07 versus -$0.80).
- The gross profit margin for ELONG INC is currently very high, coming in at 75.49%. Regardless of LONG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LONG's net profit margin of -16.84% significantly underperformed when compared to the industry average.
- In its most recent trading session, LONG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors.