NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, compelling growth in net income, notable return on equity and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.6%. Since the same quarter one year prior, revenues rose by 21.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 127.5% when compared to the same quarter one year prior, rising from $15.18 million to $34.53 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Electronic Equipment, Instruments & Components industry and the overall market, NEWPORT CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- NEWPORT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NEWPORT CORP increased its bottom line by earning $2.06 versus $1.10 in the prior year. For the next year, the market is expecting a contraction of 39.8% in earnings ($1.24 versus $2.06).
Newport Corporation, together with its subsidiaries, engages in the design, development, manufacture, and marketing of technology products and systems primarily in the United States, Pacific Rim, and Europe. The company has a P/E ratio of 11.8, above the average electronics industry P/E ratio of 11.5 and below the S&P 500 P/E ratio of 17.7. Newport has a market cap of $675.5 million and is part of the
industry. Shares are up 29.6% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet RatingsStaff