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 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, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
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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 96.7% when compared to the same quarter one year ago, falling from $8.19 million to $0.27 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, RUBICON TECHNOLOGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for RUBICON TECHNOLOGY INC is currently lower than what is desirable, coming in at 27.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 1.40% significantly trails the industry average.
- Net operating cash flow has significantly decreased to -$7.31 million or 145.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of RUBICON TECHNOLOGY INC has not done very well: it is down 23.48% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
Rubicon Technology, Inc. develops, manufactures, and sells monocrystalline sapphire and other crystalline products for light-emitting diodes (LED), radio frequency integrated circuits (RFICs), blue laser diodes, optoelectronics, and other optical applications. The company has a P/E ratio of 46.1, above the S&P 500 P/E ratio of 17.7. Rubicon Technology has a market cap of $197.2 million and is part of the technology sector and electronics industry. Shares are down 3.8% 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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