Is this site penalized?

[BlinkWeb]

So I am working on a potential new client and they run several very well established and well ranking ecommerce sites. They have 1 site which is new and underperforming which they want me to "start" on as a trial. The idea being that if they like the progress I would take over SEO on the other sites. After a little research I am concerned that this site may be have a penalty. The site is www.discoverhookah.com

The MOZrank and MOZtrust are actually pretty good considering the site is 6 months old, but if you look at the links they are ALL junk. They seems to be some reciprocal linking as well. I believe this is something they have done on their other sites and been ok with because they are 10+ years old and very trusted, however for a new site this link profile worries me.

I do not have their analytics yet but looking at their traffic in compete.com shows a HUGE drop off shortly after the site went up (like from 2500 to under 100 visitors). I dont really trust compete.com's numbers outside of being and good indicator for trends, but it has me concerned.

The client did tell me they are getting virtually no traffic. I am waiting on the crawl report to confirm its not a crawl or onsite problem but i dont think it is.

I have 2 concerns:

1. I am taking this site on the cheap in order to establish a successful project, so I can work on their other sites, and I dont want to walk into a losing situation on the cheap!

2. I believe their webmaster is following some misguided SEO strategies but she has been with them for a long time. I dont think she wants to do theor SEO anyway, as she is very busy with maintenance and development, but if I could prove a penalty it would go a long way in helping me win the whole account from an SEO standpoint.

[ThomasHgenhaven]

The website is not severely penalized as it still ranks for its domain name - http://www.google.com/search?hl=en&source=hp&biw=1239&bih=869&q=discoverhookah&aq=f&aqi=g-s1g-v1g-sv4&aql=&oq=

It wouldn't do that, if it had a filter penalty or was deindexed.

The home page doesn't have any text on it besides text link. The sub pages are super poorly optimized. So no, I don't think it has a penalty. It just needs some SEO love.