TheStreet Ratings team rates LSI Corp as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate LSI Corp (LSI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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 increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LSI 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. To add to this, LSI has a quick ratio of 2.08, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for LSI Corp is rather high; currently it is at 59.15%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, LSI's net profit margin of 6.02% significantly trails the industry average.
- LSI Corp's earnings per share declined by 14.3% 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, LSI Corp increased its bottom line by earning 34 cents a share vs. 15 cents a share in the prior year. This year, the market expects an improvement in earnings (64 cents vs. 34 cents).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: LSI Ratings Report