NEW YORK (TheStreet) -- Ruckus Wireless (RKUS)  stock is soaring Friday on reports Google (GOOG) - Get Report will collaborate with the maker of WiFi equipment on a joint project. According to a report from Gigaom, Google has enlisted Ruckus' help to build out a cloud-based Wi-Fi network through which they could offer small and medium-sized businesses WiFi services. 

By late morning, shares had added 6.7% to $10.46. Trading volume of 2 million shares had exceeded its three-month daily average of 1.6 million. 

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TheStreet Ratings team rates RUCKUS WIRELESS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate RUCKUS WIRELESS INC (RKUS) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Communications Equipment industry. The net income has decreased by 13.1% when compared to the same quarter one year ago, dropping from $0.31 million to $0.27 million.
  • This stock's share value has moved by only 27.61% over the past year. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, RKUS is still more expensive than most of the other companies in its industry.
  • RUCKUS WIRELESS INC has shown no change in earnings for its most recently reported quarter when compared with the same quarter a year earlier. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, RUCKUS WIRELESS INC reported lower earnings of $0.02 versus $0.03 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus $0.02).
  • Compared to other companies in the Communications Equipment industry and the overall market, RUCKUS WIRELESS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RUCKUS WIRELESS INC is currently very high, coming in at 70.24%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RKUS's net profit margin of 0.36% significantly trails the industry average.

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