NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and disappointing return on equity.
Highlights from the ratings report include:
- AIXG 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.15, which illustrates the ability to avoid short-term cash problems.
- 37.00% is the gross profit margin for AIXTRON SE which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, AIXG's net profit margin of -13.90% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to -$30.03 million or 124.58% 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.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 111.1% when compared to the same quarter one year ago, falling from $86.92 million to -$9.67 million.
Aixtron SE, together with its subsidiaries, engages in developing, producing, and installing deposition equipment for the semiconductor and compound-semiconductor industry. The company has a P/E ratio of 29.9, above the average electronics industry P/E ratio of 5.4 and above the S&P 500 P/E ratio of 17.7. Aixtron SE NA has a market cap of $1.5 billion and is part of the
industry. Shares are down 59% year to date as of the close of trading on Tuesday.
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