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. TheStreet Ratings quantitative algorithm evaluates over 4,300 stocks on a daily basis by 32 different data factors and assigns a unique buy, sell, or hold recommendation on each stock. Click here to learn more.
NEW YORK (TheStreet) -- Pizza Inn Holdings Inc (PZZI) 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 PIZZA INN HOLDINGS INC (PZZI) a SELL. This is driven by several 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 poor profit margins and generally disappointing historical performance in the stock itself."
Must Read: Warren Buffett's 25 Favorite Stocks
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for PIZZA INN HOLDINGS INC is currently extremely low, coming in at 11.54%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.36% is significantly below that of the industry average.
- PZZI has underperformed the S&P 500 Index, declining 18.65% 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, PIZZA INN HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- PIZZA INN HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable Earnings per share over the past year indicate the company has sound management over its earnings and share float. During the past fiscal year, PIZZA INN HOLDINGS INC reported poor results of -$0.16 versus -$0.15 in the prior year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.2%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: PZZI Ratings Report