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 reiterated by TheStreet Ratings as a buy with a ratings score of B- . 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 expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
- ACTIVE STOCK TRADERS: Get trading ideas for stocks under $10 for less than $6/week. Start with a 14-Day Free Trial.
Highlights from the ratings report include:
- BRCM's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- BRCM's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BRCM has a quick ratio of 2.00, which demonstrates the ability of the company to cover short-term liquidity needs.
- BROADCOM CORP's earnings per share declined by 9.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BROADCOM CORP reported lower earnings of $1.64 versus $1.99 in the prior year. This year, the market expects an improvement in earnings ($2.94 versus $1.64).
- The gross profit margin for BROADCOM CORP is rather high; currently it is at 52.50%. Regardless of BRCM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BRCM's net profit margin of 8.10% is significantly lower than the same period one year prior.
- Net operating cash flow has decreased to $349.00 million or 28.48% when compared to the same quarter last year. Despite a decrease in cash flow BROADCOM CORP is still fairing well by exceeding its industry average cash flow growth rate of -74.50%.
Broadcom Corporation designs and develops semiconductor solutions for wired and wireless communications. It provides a portfolio of system-on-a-chip (SoC) and software solutions. Broadcom has a market cap of $17.54 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 21.4, above the S&P 500 P/E ratio of 17.7. Shares are up 17.7% year to date as of the close of trading on Thursday.
You can view the full
or get investment ideas from our
--Written by a member of TheStreet Ratings Staff.
FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge!
Free Download Now