FBR upgraded Knowles to "market perform" from "underperform" in a note to investors, according to The Fly. The analyst firm also raised its price target for the company to $18 from $17.
The analyst firm said that Chipworks identified a fourth microphone made by Knowles in the new Apple (AAPL) - Get Report iPhone 6s and iPhone 6s Plus, prompting the upgrade. Previous iPhones contained a total of three microphones.
FBR analyst Christopher Rolland also noted that a key Knowles competitor encountered difficulties in sourcing qualified MEMS wafer from its third-party manufacturing partner, which helps the company.
About 1.9 million shares of Knowles were traded by 11:34 a.m. Monday, above the company's average trading volume of about 1.4 million shares a day.
TheStreet Ratings team rates KNOWLES CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
We rate KNOWLES CORP (KN) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has decreased to $17.50 million or 19.10% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- KN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 42.36%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- KN, with its decline in revenue, slightly underperformed the industry average of 6.6%. Since the same quarter one year prior, revenues fell by 14.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
- Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, KNOWLES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: KN