- The debt-to-equity ratio of 1.18 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, NETE has a quick ratio of 0.61, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly decreased to -$0.17 million or 122.32% 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 gross profit margin for NET ELEMENT INC is rather low; currently it is at 16.71%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, NETE's net profit margin of -40.41% significantly underperformed when compared to the industry average.
- NETE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 91.63%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Compared to other companies in the Internet Software & Services industry and the overall market, NET ELEMENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
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. The Internet industry as a whole closed the day up 0.3% versus the S&P 500, which was up 0.7%. Laggards within the Internet industry included Rediff.com India ( REDF), down 3.4%, Selectica ( SLTC), down 3.1%, Net Element ( NETE), down 12.5%, Wowo ( WOWO), down 1.7% and Tremor Video ( TRMR), down 2.1%. TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today: Net Element ( NETE) is one of the companies that pushed the Internet industry lower today. Net Element was down $0.02 (12.5%) to $0.14 on average volume. Throughout the day, 916,102 shares of Net Element exchanged hands as compared to its average daily volume of 694,300 shares. The stock ranged in price between $0.14-$0.17 after having opened the day at $0.16 as compared to the previous trading day's close of $0.16. Net Element, Inc., a global payments-as-a-service, operates as a technology provider with an integrated mobile and transactional services platform serving emerging market clients. Net Element has a market cap of $7.9 million and is part of the technology sector. Shares are down 85.8% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Net Element a buy, no analysts rate it a sell, and none rate it a hold. EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE. TheStreet Ratings rates Net Element as a sell. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself. Highlights from TheStreet Ratings analysis on NETE go as follows: