China TechFaith Wireless Comm Tech Ltd Stock Downgraded (CNTF)

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) -- China TechFaith Wireless Comm Tech (Nasdaq: CNTF) 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 poor profit margins.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

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 when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 1045.4% when compared to the same quarter one year ago, falling from $0.31 million to -$2.89 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. Compared to other companies in the Computers & Peripherals industry and the overall market, CHINA TECHFAITH WIRELESS-ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA TECHFAITH WIRELESS-ADR is currently extremely low, coming in at 9.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -10.80% is significantly below that of the industry average.
  • CNTF, with its decline in revenue, underperformed when compared the industry average of 4.3%. Since the same quarter one year prior, revenues slightly dropped by 6.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CHINA TECHFAITH WIRELESS-ADR 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. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, CHINA TECHFAITH WIRELESS-ADR continued to lose money by earning -$0.05 versus -$0.06 in the prior year.

China Techfaith Wireless Communication Technology Limited engages in the original design, development, and sale of handsets. China TechFaith Wireless Comm Tech has a market cap of $70.9 million and is part of the technology sector and computer hardware industry. Shares are down 19.2% year to date as of the close of trading on Friday.

You can view the full China TechFaith Wireless Comm Tech Ratings Report or get investment ideas from our investment research center.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

The Stock Market Is on Autopilot

The Stock Market Is on Autopilot

3 Stocks Moving The Computer Hardware Industry Upward

3 Stocks Moving The Computer Hardware Industry Upward

3 Stocks Advancing The Telecommunications Industry

3 Stocks Advancing The Telecommunications Industry

3 Stocks Pushing The Computer Hardware Industry Lower

3 Stocks Pushing The Computer Hardware Industry Lower

3 Stocks Moving The Computer Hardware Industry Upward

3 Stocks Moving The Computer Hardware Industry Upward