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 (
-- Broadcom Corporation
) 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, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 12.6%. Since the same quarter one year prior, revenues rose by 14.3%. 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 0.22 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 1.85, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $593.00 million or 23.02% when compared to the same quarter last year. In addition, BROADCOM CORP has also vastly surpassed the industry average cash flow growth rate of -37.89%.
- The gross profit margin for BROADCOM CORP is rather high; currently it is at 55.00%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.06% trails the industry average.
- BROADCOM CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, BROADCOM CORP reported lower earnings of $1.24 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($2.75 versus $1.24).
Broadcom Corporation provides semiconductor solutions for wired and wireless communications. Its products offer voice, video, data, and multimedia connectivity in the home, office, and mobile environments. Broadcom has a market cap of $17.71 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 27.4, above the S&P 500 P/E ratio of 17.7. Shares are up 3.7% year to date as of the close of trading on Tuesday.
You can view the full
or get investment ideas from our
--Written by a member of TheStreet Ratings Staff.
It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE