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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- VICOR CORP 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, VICOR CORP swung to a loss, reporting -$0.10 versus $0.22 in the prior year.
- 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 811.1% when compared to the same quarter one year ago, falling from $0.68 million to -$4.81 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Electrical Equipment industry and the overall market, VICOR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 40.72%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 700.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 45.00% 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, VICR's net profit margin of -9.54% significantly underperformed when compared to the industry average.
Vicor Corporation, together with its subsidiaries, engages in the design, development, manufacture, and marketing of modular power components and power systems worldwide. The company has a P/E ratio of 168.7, above the S&P 500 P/E ratio of 17.7. Vicor has a market cap of $152 million and is part of the technology sector and electronics industry. Shares are down 6.6% 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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