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, increase in net income, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 23.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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 47.4% when compared to the same quarter one year prior, rising from $31.69 million to $46.71 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 Electronic Equipment, Instruments & Components industry and the overall market, POWER-ONE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- POWER-ONE INC has improved earnings per share by 42.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, POWER-ONE INC reported lower earnings of $0.89 versus $0.96 in the prior year. For the next year, the market is expecting a contraction of 47.2% in earnings ($0.47 versus $0.89).
Power-One, Inc. engages in the design, manufacture, sale, and service of power supply products for the renewable energy (RE), servers, storage and networking, telecommunications, industrials, and network power systems industries worldwide. The company has a P/E ratio of 6.1, below the average electronics industry P/E ratio of 6.8 and below the S&P 500 P/E ratio of 17.7. Power-One has a market cap of $595.2 million and is part of the
industry. Shares are up 17.9% year to date as of the close of trading on Monday.
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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.