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) -- DRDGold (NYSE: DRD) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.
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- DRDGOLD LTD 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. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, DRDGOLD LTD reported lower earnings of $0.16 versus $0.69 in the prior year. For the next year, the market is expecting a contraction of 131.3% in earnings (-$0.05 versus $0.16).
- 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 Metals & Mining industry. The net income has significantly decreased by 102.7% when compared to the same quarter one year ago, falling from $10.74 million to -$0.29 million.
- 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 Metals & Mining industry and the overall market, DRDGOLD LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for DRDGOLD LTD is rather low; currently it is at 18.86%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -0.70% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $0.99 million or 96.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.