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"We rate SMARTPROS LTD (SPRO) a SELL. This is driven by some concerns, 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 unimpressive growth in net income and weak operating cash flow."
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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 Professional Services industry. The net income has significantly decreased by 7122.2% when compared to the same quarter one year ago, falling from $0.01 million to -$0.63 million.
- Net operating cash flow has significantly decreased to -$0.30 million or 2408.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Professional Services industry and the overall market, SMARTPROS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- This stock's share value has moved by only 24.77% over the past year. 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.
- SMARTPROS LTD's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SMARTPROS LTD turned its bottom line around by earning $0.02 versus -$0.41 in the prior year.
- You can view the full analysis from the report here: SPRO Ratings Report