NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.4%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- VICR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.53, which clearly demonstrates the ability to cover short-term cash needs.
- 46.00% is the gross profit margin for VICOR CORP which we consider to be strong. Regardless of VICR'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 4.70% trails the industry average.
- 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 Electrical Equipment industry. The net income has significantly decreased by 35.4% when compared to the same quarter one year ago, falling from $4.75 million to $3.07 million.
- The share price of VICOR CORP has not done very well: it is down 25.00% 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. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
Vicor Corporation, together with its subsidiaries, engages in the design, development, manufacture, and marketing of modular power components and power systems. The company has a P/E ratio of 12.9, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Vicor has a market cap of $313.3 million and is part of the
industry. Shares are down 38.4% year to date as of the close of trading on Friday.
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