Update (9:50 a.m.): Updated with Wednesday market open activity.
NEW YORK (TheStreet) -- DA Davidson upgraded Cabot Microelectronics (CCMP - Get Report) to "buy" from "neutral" and set a target price of $50. The firm noted that the company could be a takeover target.
The stock was rising 4.93% to $43.43 shortly after the market opened on Wednesday.
Separately, TheStreet Ratings team rates CABOT MICROELECTRONICS CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate CABOT MICROELECTRONICS CORP (CCMP) 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 compelling growth in net income, notable return on equity, reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income increased by 16.5% when compared to the same quarter one year prior, going from $9.70 million to $11.31 million.
- 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 Semiconductors & Semiconductor Equipment industry and the overall market, CABOT MICROELECTRONICS CORP's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for CABOT MICROELECTRONICS CORP is rather high; currently it is at 52.45%. 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 11.25% trails the industry average.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: CCMP Ratings Report