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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
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Highlights from the ratings report include:
- MLNX's very impressive revenue growth greatly exceeded the industry average of 4.0%. Since the same quarter one year prior, revenues leaped by 129.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MLNX's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.40, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MELLANOX TECHNOLOGIES LTD's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for MELLANOX TECHNOLOGIES LTD is currently very high, coming in at 73.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.90% is above that of the industry average.
- Net operating cash flow has significantly increased by 399.00% to $74.35 million when compared to the same quarter last year. In addition, MELLANOX TECHNOLOGIES LTD has also vastly surpassed the industry average cash flow growth rate of -28.04%.
Mellanox technologies, Ltd., a fabless semiconductor company, produces and supplies interconnect products for computing, storage, and communication applications in the computing, Web 2.0, storage, financial services, database, and cloud markets. Mellanox has a market cap of $3.57 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 27.6, above the S&P 500 P/E ratio of 17.7. Shares are up 159.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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