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NEW YORK (TheStreet) -- Bluephoenix Solutions (BPHX) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLUEPHOENIX SOLUTIONS LTD (BPHX) 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 disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, BLUEPHOENIX SOLUTIONS LTD'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 -$0.48 million or 127.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- BPHX has underperformed the S&P 500 Index, declining 9.14% 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 revenue fell significantly faster than the industry average of 11.5%. Since the same quarter one year prior, revenues fell by 20.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- 46.15% is the gross profit margin for BLUEPHOENIX SOLUTIONS LTD which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, BPHX's net profit margin of -39.97% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: BPHX Ratings Report