NEW YORK (TheStreet) -- Intersil Corporation (Nasdaq:ISIL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow. Highlights from the ratings report include:
- ISIL's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.87, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for INTERSIL CORP is rather high; currently it is at 57.80%. Regardless of ISIL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ISIL's net profit margin of -2.10% significantly underperformed when compared to the industry average.
- 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 123.3% when compared to the same quarter one year ago, falling from $14.13 million to -$3.30 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.31%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 127.27% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, ISIL is still more expensive than most of the other companies in its industry.
-- Written by a member of TheStreet Ratings Staff
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