NEW YORK (TheStreet) -- American Superconductor (AMSC - Get Report) was gaining 24.1% to $2.00 Wednesday after announcing a partnership with Exelon's (EXC) ComEd to create a superconductor-based resilient electric grid system.
The two companies agreed to develop a deployment plans that will build a superconducting cable system using American Superconductor's high temperature superconductor technology. The system will help strengthen Chicago's electric grid, and is part of a plan from the U.S. Department of Homeland Security Science and Technology to secure the country's power grids and improve their resiliency.
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- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Electrical Equipment industry average. The net income has decreased by 14.8% when compared to the same quarter one year ago, dropping from -$19.77 million to -$22.71 million.
- The gross profit margin for AMERICAN SUPERCONDUCTOR CP is currently extremely low, coming in at 14.82%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -139.40% is significantly below that of the industry average.
- AMSC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 38.29%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, AMERICAN SUPERCONDUCTOR CP's return on equity significantly trails that of both the industry average and the S&P 500.
- AMSC, with its decline in revenue, underperformed when compared the industry average of 5.4%. Since the same quarter one year prior, revenues fell by 20.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: AMSC Ratings Report