NEW YORK (TheStreet) -- Affymetrix (Nasdaq:AFFX) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 941.3% when compared to the same quarter one year prior, rising from -$3.67 million to $30.89 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 2.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- AFFYMETRIX 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, AFFYMETRIX INC reported poor results of -$0.40 versus -$0.15 in the prior year. This year, the market expects an improvement in earnings (-$0.15 versus -$0.40).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Life Sciences Tools & Services industry and the overall market, AFFYMETRIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- AFFX'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 25.85%, 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. 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, AFFX is still more expensive than most of the other companies in its industry.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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