NEW YORK (
) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.
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Highlights from the ratings report include:
- 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 203.0% when compared to the same quarter one year ago, falling from -$6.01 million to -$18.22 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. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, PLX TECHNOLOGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- PLX TECHNOLOGY INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PLX TECHNOLOGY INC reported poor results of -$0.56 versus -$0.06 in the prior year. This year, the market expects an improvement in earnings (-$0.07 versus -$0.56).
- PLXT, with its decline in revenue, underperformed when compared the industry average of 14.2%. Since the same quarter one year prior, revenues fell by 15.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for PLX TECHNOLOGY INC is rather high; currently it is at 50.80%. Regardless of PLXT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PLXT's net profit margin of -69.90% significantly underperformed when compared to the industry average.
PLX Technology, Inc. designs, develops, manufactures, and sells semiconductor devices worldwide. PLX Technology has a market cap of $239.6 million and is part of the
industry. Shares are up 86.4% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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.