Why Oculus Innovative Sciences (OCLS) Stock Is Lower In After-Hours Trading

NEW YORK (TheStreet) -- Shares of Oculus Innovative Sciences (OCLS) are down -4.26% to $3.150 in after-hours trading on Thursday.

The healthcare company reported fourth quarter results for fiscal year 2014, ending March 31 with total revenue falling 37% to $2.9 million in the period, compared to $3.3 million for the same period a year ago.

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Net income rose to $7.5 million for the fourth quarter, compared to a net loss of $2.4 million in the period.

Oculus cites lower sales of animal healthcare and dermatology products due to severe winter weather and stronger competition.

TheStreet Ratings team rates OCULUS INNOVATIVE SCIENCES as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate OCULUS INNOVATIVE SCIENCES (OCLS) a SELL. This is driven by some concerns, 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. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • OCLS has underperformed the S&P 500 Index, declining 10.20% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market, OCULUS INNOVATIVE SCIENCES's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for OCULUS INNOVATIVE SCIENCES is rather high; currently it is at 66.32%. Regardless of OCLS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OCLS's net profit margin of -18.55% significantly underperformed when compared to the industry average.
  • OCLS, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • OCLS's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
  • You can view the full analysis from the report here: OCLS Ratings Report

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