- ECHELON CORP 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, ECHELON CORP reported poor results of -$0.41 versus -$0.30 in the prior year. For the next year, the market is expecting a contraction of 13.7% in earnings (-$0.47 versus -$0.41).
- 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 941.5% when compared to the same quarter one year ago, falling from -$0.83 million to -$8.61 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 Electronic Equipment, Instruments & Components industry and the overall market, ECHELON 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 -$3.27 million or 296.68% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, ELON 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 our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
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. All three major indices traded up today with the Dow Jones Industrial Average ( ^DJI) trading up 30 points (0.2%) at 17,107 as of Tuesday, Aug. 26, 2014, 4:20 PM ET. The NYSE advances/declines ratio sits at 2,006 issues advancing vs. 1,020 declining with 179 unchanged. The Computer Hardware industry as a whole closed the day up 1.1% versus the S&P 500, which was up 0.1%. Top gainers within the Computer Hardware industry included Interphase ( INPH), up 4.4%, Qumu ( QUMU), up 1.9%, Echelon ( ELON), up 4.5%, Crossroads Systems ( CRDS), up 2.1% and Acorn Energy ( ACFN), up 2.1%. TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today: Echelon ( ELON) is one of the companies that pushed the Computer Hardware industry higher today. Echelon was up $0.10 (4.5%) to $2.30 on average volume. Throughout the day, 133,474 shares of Echelon exchanged hands as compared to its average daily volume of 117,900 shares. The stock ranged in a price between $2.19-$2.31 after having opened the day at $2.22 as compared to the previous trading day's close of $2.20. Echelon Corporation develops and markets energy control networking platforms. Its products enable everyday devices, including air conditioners, appliances, electricity meters, light switches, thermostats, and valves to be inter-connected. Echelon has a market cap of $93.6 million and is part of the technology sector. Shares are up 2.3% year-to-date as of the close of trading on Monday. Currently there are no analysts who rate Echelon a buy, no analysts rate it a sell, and 1 rates it a hold. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreet Ratings rates Echelon as a 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 weak operating cash flow. Highlights from TheStreet Ratings analysis on ELON go as follows: