Ruckus Wireless (RKUS) Is Today's Perilous Reversal Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ruckus Wireless as such a stock due to the following factors:
- RKUS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.8 million.
- RKUS has traded 157,050 shares today.
- RKUS is down 3% today.
- RKUS was up 5.3% yesterday.
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More details on RKUS:
Ruckus Wireless, Inc. provides carrier-class Wi-Fi solutions to service providers and enterprises worldwide. It provides gateways, controllers, and access points with related software and services. RKUS has a PE ratio of 131.8. Currently there are 9 analysts that rate Ruckus Wireless a buy, 1 analyst rates it a sell, and 3 rate it a hold.
The average volume for Ruckus Wireless has been 1.5 million shares per day over the past 30 days. Ruckus Wireless has a market cap of $998.3 million and is part of the technology sector and computer hardware industry. Shares are unchanged year-to-date as of the close of trading on Thursday.
Analysis:
rates Ruckus Wireless as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.5%. Since the same quarter one year prior, revenues rose by 17.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- RKUS 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 3.16, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for RUCKUS WIRELESS INC is rather high; currently it is at 68.40%. Regardless of RKUS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, RKUS's net profit margin of 3.40% is significantly lower than the industry average.
- Net operating cash flow has decreased to $5.22 million or 42.99% 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.
- RKUS has underperformed the S&P 500 Index, declining 12.33% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full Ruckus Wireless Ratings Report.
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