NEW YORK (TheStreet) -- Himax Technology (HIMX - Get Report) shares are down -4.1% to $6.32 in pre-market trading after it was downgraded to "sell" from "neutral" by analysts at UBS AG (UBS - Get Report) on Tuesday.
The firm also slashed the integrated circuit developer's price target to $5.60 from $13.70 based on weak Chinese television demand and slow progress on the non integrated circuit side of the company's business.
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TheStreet Ratings team rates HIMAX TECHNOLOGIES INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HIMAX TECHNOLOGIES INC (HIMX) 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, growth in earnings per share, reasonable valuation levels and increase in net income. 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:
- HIMX's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 10.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HIMX's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HIMX has a quick ratio of 1.56, which demonstrates the ability of the company to cover short-term liquidity needs.
- HIMAX TECHNOLOGIES INC has improved earnings per share by 12.5% 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, HIMAX TECHNOLOGIES INC increased its bottom line by earning $0.35 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.35).
- The net income growth from the same quarter one year ago has exceeded that of the Semiconductors & Semiconductor Equipment industry average, but is less than that of the S&P 500. The net income increased by 12.0% when compared to the same quarter one year prior, going from $14.03 million to $15.71 million.
- You can view the full analysis from the report here: HIMX Ratings Report