NEW YORK (TheStreet) -- WPCS International (WPCS) was gaining 12.6% to $1.08 Monday after announcing the launch of Celery, a service that lets users buy digital currency, and providing an update on BTX Trader.
The company's new Celery service lets users easily purchase digital currency and store it in an online wallet. The service uses bank transfers to make it easy to use. Celery is currently focused on Bitcoin and Dogecoin cryptocurrencies.
WPCS International also announced that BTX Trader's web app is available to 5,000 users with more than 1,500 unique visitors each month.
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TheStreet Ratings team rates WPCS INTERNATIONAL INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WPCS INTERNATIONAL INC (WPCS) a SELL. This is driven by a few notable 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 deteriorating net income, 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:
- 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 IT Services industry. The net income has significantly decreased by 189.9% when compared to the same quarter one year ago, falling from -$1.22 million to -$3.55 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 IT Services industry and the overall market, WPCS INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for WPCS INTERNATIONAL INC is rather low; currently it is at 24.93%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -42.77% is significantly below that of the industry average.
- WPCS'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 80.46%, 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 debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: WPCS Ratings Report