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"We rate VIMICRO INTL CORP -ADR (VIMC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its price level of one year ago, VIMC is up 200.33% to its most recent closing price of 8.95. Looking ahead, our view is that this company's fundamentals should not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- VIMC's revenue growth has slightly outpaced the industry average of 9.0%. Since the same quarter one year prior, revenues rose by 14.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- VIMICRO INTL CORP -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VIMICRO INTL CORP -ADR swung to a loss, reporting -$0.30 versus $0.05 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus -$0.30).
- 39.41% is the gross profit margin for VIMICRO INTL CORP -ADR which we consider to be strong. Regardless of VIMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VIMC's net profit margin of 12.05% is significantly lower than the industry average.
- 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, VIMICRO INTL CORP -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: VIMC Ratings Report
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