PDF Solutions (NASDAQ: PDFS) is rated at BUY with a grade of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- PDF SOLUTIONS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PDF SOLUTIONS INC increased its bottom line by earning $0.06 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.66 versus $0.06).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, PDF SOLUTIONS INC's return on equity exceeds that of both the industry average and the S&P 500.
- PDFS 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 5.71, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 33.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
PDF Solutions, Inc. provides infrastructure technologies and services for the design and manufacture of integrated circuits (IC) in Asia, the United States, and Europe.You can view the full PDF Solutions Ratings Report or get investment ideas from our investment research center.