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CyberOptics Corporation Stock Downgraded (CYBE)

Editor's Note: 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

NEW YORK ( TheStreet) -- CyberOptics Corporation (Nasdaq: CYBE) 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:

  • CYBE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.00, which clearly demonstrates the ability to cover short-term cash needs.
  • CYBEROPTICS CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, CYBEROPTICS CORP increased its bottom line by earning $0.62 versus $0.46 in the prior year. This year, the market expects an improvement in earnings ($0.75 versus $0.62).
  • The revenue fell significantly faster than the industry average of 13.8%. Since the same quarter one year prior, revenues fell by 22.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.59%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 90.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
  • 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 89.8% when compared to the same quarter one year ago, falling from $1.40 million to $0.14 million.

CyberOptics Corporation supplies optical process control sensors and inspection systems to control the manufacturing process and ensure the quality of electronic circuit boards worldwide. The company has a P/E ratio of 18, below the average electronics industry P/E ratio of 19 and above the S&P 500 P/E ratio of 17.7. CyberOptics has a market cap of $43.4 million and is part of the technology sector and electronics industry. Shares are down 21.4% year to date as of the close of trading on Thursday.

You can view the full CyberOptics Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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