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 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- VLTR's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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.
- VLTR 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 10.42, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for VOLTERRA SEMICONDUCTOR CORP is rather high; currently it is at 60.20%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.40% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income has decreased by 12.6% when compared to the same quarter one year ago, dropping from $6.94 million to $6.07 million.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, VLTR has underperformed the S&P 500 Index, declining 20.19% from its price level of one year ago. 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.
Volterra Semiconductor Corporation engages in the design, development, and marketing of analog and mixed-signal power management semiconductors for computing, storage, networking, and consumer markets. The company has a P/E ratio of 19.2, equal to the average electronics industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Volterra Semiconductor has a market cap of $453.7 million and is part of the technology sector and electronics industry. Shares are down 29.9% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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