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TheStreet Open House

Why CUI Global (CUI) Stock Plummeted Today

NEW YORK (TheStreet) -- CUI Global (CUI) plunged 11.5% to $9.74 in trading Tuesday.

The decline comes following the release of the electronics platform company's full year 2013 financial results.

The company reported a full year net loss of 10 cents per share, significantly lower than analysts consensus estimate of a profit of 2 cents per share.

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TheStreet Ratings team rates CUI GLOBAL INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CUI GLOBAL INC (CUI) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

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

  • CUI's very impressive revenue growth greatly exceeded the industry average of 1.8%. Since the same quarter one year prior, revenues leaped by 60.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CUI's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.58, which clearly demonstrates the ability to cover short-term cash needs.
  • CUI GLOBAL INC reported significant earnings per share improvement 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, CUI GLOBAL INC reported poor results of -$0.27 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.02 versus -$0.27).
  • 38.34% is the gross profit margin for CUI GLOBAL INC which we consider to be strong. Regardless of CUI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.24% trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, CUI GLOBAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CUI Ratings Report
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