NEW YORK (TheStreet) -- Alpha and Omega Semiconductor (AOSL - Get Report) shares are up 3.2% to $8.93 on Tuesday after having coverage initiated with an "outperform" rating and $13 price target by analysts at Northland Capital.
The firm's optimistic outlooks stems from its belief that the company will return to profitability in the near future.
The stock is trading on heavy volume in early market trading today with 138,032 shares being traded so far, well ahead of its three month daily average of 56,903 shares.
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Separately, TheStreet Ratings team rates ALPHA AND OMEGA SEMICONDUCTR as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALPHA AND OMEGA SEMICONDUCTR (AOSL) a SELL. This is driven by a few notable weaknesses, 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. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ALPHA AND OMEGA SEMICONDUCTR's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ALPHA AND OMEGA SEMICONDUCTR is currently lower than what is desirable, coming in at 25.49%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.36% is significantly below that of the industry average.
- Net operating cash flow has decreased to $11.92 million or 12.25% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- ALPHA AND OMEGA SEMICONDUCTR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ALPHA AND OMEGA SEMICONDUCTR swung to a loss, reporting -$0.23 versus $0.50 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 75.0% when compared to the same quarter one year prior, rising from -$13.17 million to -$3.29 million.
- You can view the full analysis from the report here: AOSL Ratings Report