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 robust revenue growth, compelling growth in net income, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- SPRD's very impressive revenue growth greatly exceeded the industry average of 18.8%. Since the same quarter one year prior, revenues leaped by 51.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SPREADTRUM COMMUNICATNS -ADR's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 17.4% when compared to the same quarter one year prior, going from $29.96 million to $35.18 million.
- 40.80% is the gross profit margin for SPREADTRUM COMMUNICATNS -ADR which we consider to be strong. Regardless of SPRD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 18.30% trails the industry average.
Spreadtrum Communications, Inc., a fabless semiconductor company, engages in the design, development, and marketing of mobile chipset platforms for smartphones, feature phones, and other consumer electronics products in the People's Republic of China and internationally. The company has a P/E ratio of six, below the average electronics industry P/E ratio of 6.6 and below the S&P 500 P/E ratio of 17.7. Spreadtrum has a market cap of $789.7 million and is part of the
industry. Shares are down 34.5% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet RatingsStaff