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Why Intel (INTC) Is Still a 'Buy'

NEW YORK (TheStreet) -- TheStreet Ratings team has reiterated its "buy" rating for Intel (INTC), with a ratings score of B, marking Monday's decline as a chance to buy.

Shares of Intel fell 1.2% to $25.46 Monday.

Shares of the chipmaker rose 3.9% over the past month and gained 21.3% over the past year. Intel hit a yearlong high of $25.96 on Dec. 31, 2013. More than 27 million shares of the company changed hand on Monday.

Intel is expected to debut its processors in new mobile devices and wearable at the Consumer Electronics Show this week.

TheStreet Ratings team rates Intel as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTEL CORP (INTC) a BUY. This is driven by a number of 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Although INTC's debt-to-equity ratio of 0.24 is very low, it is currently higher than that of the industry average. To add to this, INTC has a quick ratio of 1.65, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $5,731.00 million or 11.34% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -12.49%.
  • The gross profit margin for INTEL CORP is currently very high, coming in at 76.84%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 21.87% trails the industry average.

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