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Why Immersion (IMMR) Stock Is Up Today

Stocks in this article: IMMR

NEW YORK (TheStreet) -- Shares of Immersion Corp. (IMMR) are jumping 7.32% to $13.49 after it announced entering into a multi-year license agreement with Huawei Device Co. Ltd to use Immersion's haptic software, called TouchSense 3000, on Huawei branded mobile devices.

Financial terms of the agreement were not disclosed.

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TheStreet Ratings team rates IMMERSION CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate IMMERSION CORP (IMMR) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself."

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

  • IMMR's revenue growth has slightly outpaced the industry average of 2.2%. Since the same quarter one year prior, revenues rose by 11.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • IMMR 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. Along with this, the company maintains a quick ratio of 2.74, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the Computers & Peripherals industry average, but is less than that of the S&P 500. The net income increased by 10.5% when compared to the same quarter one year prior, going from $1.69 million to $1.86 million.
  • IMMR has underperformed the S&P 500 Index, declining 6.51% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has decreased to $16.44 million or 16.36% 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.
  • You can view the full analysis from the report here: IMMR Ratings Report
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