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We calculated DRAM's Altman Z-Score |
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and it did not come out good. |
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Released on Monday, October 24, 2011, 8:00 AM ET
Pittsburgh, PA (SpeculatingStocks) -Dataram Corporation (NYSE:DRAM) is getting about as much gas millage as a Dodge Ram. The company manufactures high-performance network servers and computer workstations, but what it does not produce is profits.
Having the same business division as Micron Technologies, a stock we wrote about in September, Dataram is interested in the semi-conductor usage in this modern world, but they are not nearly as profitable.
To top off the list, DRAM has a profit margin of -9.58% and a return on equity of -49.54%. It’s not surprising since the company has a total debt to equity ratio of 26.10, making it well over extended for its position on the markets. With an additional negative free cash flow, this company is moving quickly into direct hardship.
Because this company seemed to be on shaky footings, we went ahead and calculated its Altman Z-Score: a valuation which predicts how likely a company is to fail or proceed safely into the future. We were not all that surprised when the value returned was 1.21. Values below 1.80 indicate that a company’s chance of financial liquidation is very high; let alone values between 2.7 and 1.8 show companies who are likely to be bankrupt within 2 years of current operations.
The stock is currently trading at $1.25 per share (4:00 PM EDT, October 21st, 2011) and holds a negative EPS of $0.46. The company’s stock price has been suffering from a relative down trend since the beginning of 2010, and does not seem to be showing any movement to recovery.
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