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NEW YORK ( TheStreet) -- Boingo Wireless (Nasdaq: WIFI) 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 and generally disappointing historical performance in the stock itself.

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Highlights from the ratings report include:
  • BOINGO WIRELESS 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. 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, BOINGO WIRELESS INC swung to a loss, reporting -$0.11 versus $0.19 in the prior year. For the next year, the market is expecting a contraction of 190.9% in earnings (-$0.32 versus -$0.11).
  • 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 386.0% when compared to the same quarter one year ago, falling from -$1.12 million to -$5.45 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 Wireless Telecommunication Services industry and the overall market, BOINGO WIRELESS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, WIFI 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • 48.21% is the gross profit margin for BOINGO WIRELESS INC which we consider to be strong. Regardless of WIFI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WIFI's net profit margin of -20.59% significantly underperformed when compared to the industry average.

Boingo Wireless, Inc., together with its subsidiaries, provides high-speed, high-bandwidth wireless Internet service to smartphones, tablet computers, laptops, and other wireless-enabled devices. Boingo Wireless has a market cap of $225.7 million and is part of the technology sector and telecommunications industry. Shares are down 1.1% year to date as of the close of trading on Friday.

You can view the full Boingo Wireless Ratings Report or get investment ideas from our investment research center.

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