Acorn Energy subsidiary DSIT Solutions recently completed the first milestone of a contract received in later 2013. The contract value is greater than $14 million, with a fixed amount of $11.2 million contingent on the customer's requirements. DSIT Solutions will supply and support an advanced underwater acoustic monitoring system as part of the contract.
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TheStreet Ratings team rates ACORN ENERGY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACORN ENERGY INC (ACFN) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Commercial Services & Supplies industry and the overall market, ACORN ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ACORN ENERGY INC is currently lower than what is desirable, coming in at 34.06%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -96.63% is significantly below that of the industry average.
- ACFN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 82.68%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Commercial Services & Supplies industry average. The net income increased by 13.5% when compared to the same quarter one year prior, going from -$4.98 million to -$4.30 million.
- ACFN, with its decline in revenue, underperformed when compared the industry average of 3.8%. Since the same quarter one year prior, revenues fell by 22.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: ACFN Ratings Report