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NEW YORK (TheStreet) -- Orion Energy Systems (OESX) 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 ORION ENERGY SYSTEMS INC (OESX) 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, weak operating cash flow and feeble growth in its earnings per share."
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 Electrical Equipment industry. The net income has significantly decreased by 863.5% when compared to the same quarter one year ago, falling from $2.40 million to -$18.35 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 Electrical Equipment industry and the overall market, ORION ENERGY SYSTEMS INC'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 -$3.80 million or 150.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- ORION ENERGY SYSTEMS INC 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ORION ENERGY SYSTEMS INC continued to lose money by earning -$0.29 versus -$0.49 in the prior year. For the next year, the market is expecting a contraction of 286.2% in earnings (-$1.12 versus -$0.29).
- OESX, with its very weak revenue results, has greatly underperformed against the industry average of 11.8%. Since the same quarter one year prior, revenues plummeted by 51.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: OESX Ratings Report