Why TheStreet Ratings Team Says Eldorado Gold (EGO) Stock Is A 'Sell'

NEW YORK (TheStreet) --TheStreet Ratings team rates Eldorado Gold Corp. (EGO) as a "sell" with a ratings score of D+. 

Shares of Eldorado are higher by 5.12% to $7.49 on heavy volume in afternoon trading on Friday.

TheStreet Ratings Team has this to say about their recommendation:

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"We rate ELDORADO GOLD CORP (EGO) a SELL. This is driven by a number of negative factors, 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 and weak operating cash flow."

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 Metals & Mining industry and the overall market, ELDORADO GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $69.44 million or 58.44% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Metals & Mining industry average, but is greater than that of the S&P 500. The net income increased by 168.8% when compared to the same quarter one year prior, rising from -$45.46 million to $31.27 million.
  • EGO, with its decline in revenue, underperformed when compared the industry average of 4.5%. Since the same quarter one year prior, revenues fell by 17.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • ELDORADO GOLD CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ELDORADO GOLD CORP swung to a loss, reporting -$0.91 versus $0.45 in the prior year.
  • You can view the full analysis from the report here: EGO Ratings Report
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