Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- AIXTRON SE has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, AIXTRON SE reported lower earnings of $1.00 versus $2.52 in the prior year. For the next year, the market is expecting a contraction of 209.0% in earnings (-$1.09 versus $1.00).
- 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 946.1% when compared to the same quarter one year ago, falling from -$9.67 million to -$101.17 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, AIXTRON SE's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to -$31.12 million or 3.63% when compared to the same quarter last year. Despite a decrease in cash flow AIXTRON SE is still fairing well by exceeding its industry average cash flow growth rate of -27.08%.
- In its most recent trading session, AIXG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
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 S&P 500 P/E ratio of 17.7. Aixtron SE NA has a market cap of $1.29 billion and is part of the technology sector and electronics industry. Shares are down 0.7% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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