NEW YORK (TheStreet) -- Shares of Globalstar (GSAT) continue to slip, down 5.39% to $2.81 in midday trading Monday, following a loss of more than 16% in extended trading Friday after TheStreet's Jim Cramer said to stay away from the stock on CNBC's 'Mad Money.'
Cramer said, "Globalstar has become a total battleground. I'm not the guy to settle battles about wireless technology, but I am concerned about GSAT's balance sheet."
He also pointed out that the world's fourth-largest satellite communications company is on track to miss key covenant targets for its debt.
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About 7.79 million shares of Globalstar have traded hands as of 11:35 a.m. Monday, compared to its average trading volume of about 7.93 million shares a day.
Separately, TheStreet Ratings team rates GLOBALSTAR INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GLOBALSTAR INC (GSAT) 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 area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GLOBALSTAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GLOBALSTAR INC reported poor results of -$0.96 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings (-$0.62 versus -$0.96).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 163.1% when compared to the same quarter one year prior, rising from -$204.97 million to $129.39 million.
- 48.39% is the gross profit margin for GLOBALSTAR INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 551.98% significantly outperformed against the industry average.
- Net operating cash flow has slightly increased to $4.52 million or 8.70% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -17.01%.
- This stock has increased by 66.47% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in GSAT do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: GSAT Ratings Report