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NEW YORK (TheStreet) -- PDF Solutions (PDFS) - Get Report has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PDF SOLUTIONS INC (PDFS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PDFS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 13.80, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for PDF SOLUTIONS INC is rather high; currently it is at 58.93%. Regardless of PDFS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PDFS's net profit margin of 7.85% is significantly lower than the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 63.5% when compared to the same quarter one year ago, falling from $4.82 million to $1.76 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, PDF SOLUTIONS INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: PDFS Ratings Report