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, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
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 4527.8% when compared to the same quarter one year ago, falling from $0.50 million to -$21.96 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SIGMA DESIGNS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SIGMA DESIGNS INC is currently lower than what is desirable, coming in at 27.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -47.00% is significantly below that of the industry average.
- The share price of SIGMA DESIGNS INC has not done very well: it is down 17.82% 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.
- SIGMA DESIGNS 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. 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, SIGMA DESIGNS INC increased its bottom line by earning $0.30 versus $0.10 in the prior year. For the next year, the market is expecting a contraction of 43.3% in earnings ($0.17 versus $0.30).
Sigma Designs, Inc. provides integrated system-on-chip solutions (SoC) for the Internet protocol television (IPTV), media processor, connected home and media player, prosumer and industrial audio/video, high definition television, and PC-based add-in markets. The company has a P/E ratio of 118.4, above the average electronics industry P/E ratio of 103.6 and above the S&P 500 P/E ratio of 17.7. Sigma Designs has a market cap of $263.8 million and is part of the
industry. Shares are down 40.4% year to date as of the close of trading on Thursday.
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