NEW YORK (TheStreet) -- Universal Electronics (UEIC - Get Report) shares are plummeting, down -8.3% to $41.69, on Monday after being downgraded to "neutral" from "buy" by analysts at B. Riley.
The firm made a valuation call while also lowering the company's price target to $45.75 to $47.00.
Must Read: Warren Buffett's 25 Favorite Stocks
TheStreet Ratings team rates UNIVERSAL ELECTRONICS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNIVERSAL ELECTRONICS INC (UEIC) a BUY. This is driven by several positive factors, 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 impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- UNIVERSAL ELECTRONICS INC has improved earnings per share by 36.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNIVERSAL ELECTRONICS INC increased its bottom line by earning $1.47 versus $1.09 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $1.47).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Household Durables industry average. The net income increased by 45.0% when compared to the same quarter one year prior, rising from $2.95 million to $4.27 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 17.3%. Since the same quarter one year prior, revenues rose by 13.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- UEIC 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, UEIC has a quick ratio of 1.66, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 223.09% to $13.91 million when compared to the same quarter last year. In addition, UNIVERSAL ELECTRONICS INC has also vastly surpassed the industry average cash flow growth rate of 151.32%.
- You can view the full analysis from the report here: UEIC Ratings Report