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TheStreet Open House

Why Lantronix (LTRX) Is Up Today

NEW YORK (TheStreet) -- Lantronix  (LTRX) hit a one-year high of $3.31 on Tuesday as the stock increased more than 30% after the tech manufacturer demonstrated firmware that would make several of its products configurable to allow for delivery of pertinent data to Google Analytics  (GOOG).

Lantronix expects PremierWave and xSenso to be the first two product families to include Google Analytics functionality.

"The promise of M2M and the Internet of Things lies not in the technical specifications of the products themselves, but in how these products provide solutions that make life better -- for consumers and businesses alike," said President and CEO Kurt Busch in the company's statement. "Incorporating Google Analytics into our product offerings yields a simple, easy to use analytics engine for almost any machine. The ability to access real-time data, customized to meet the user's needs, to whatever device, wherever it's located, is what will drive the next wave of M2M adoption."

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TheStreet Ratings team rates LANTRONIX INC as a "sell" with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LANTRONIX INC (LTRX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."

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

  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Communications Equipment industry and the overall market, LANTRONIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, LTRX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • LTRX, with its decline in revenue, underperformed when compared the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 9.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • LTRX's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
  • The gross profit margin for LANTRONIX INC is rather high; currently it is at 50.70%. 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 -2.94% is in-line with the industry average.
  • You can view the full analysis from the report here: LTRX Ratings Report

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