NEW YORK (TheStreet) -- Sequans Communications (SQNS) - Get Sequans Communications SA Report is up 2.0% to $2.88 on Tuesday following the announcement that two of its device manufacturing partners in China, Datang Mobile and DareGlobal, won contracts to provide Sequans-powered TD-LTE user devices to China Telecom (CHA) - Get China Telecom Corp. Ltd. Report for the operator's commercial launch of TD-LTE service, beginning in the second quarter.
Both devices will provide China Telecom customers with internet access at 4G speed.
"China Telecom is aggressively pursuing its commercial launch in China, and we are proud that Sequans' technology will be part of it," said Sequans CEO Georges Karam.
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TheStreet Ratings team rates SEQUANS COMMUNICATIONS -ADR as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEQUANS COMMUNICATIONS -ADR (SQNS) a SELL. This is driven by a number of negative factors, 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. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SEQUANS COMMUNICATIONS -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- 43.75% is the gross profit margin for SEQUANS COMMUNICATIONS -ADR which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -166.70% is in-line with the industry average.
- Net operating cash flow has significantly increased by 95.77% to -$0.29 million when compared to the same quarter last year. In addition, SEQUANS COMMUNICATIONS -ADR has also vastly surpassed the industry average cash flow growth rate of -9.54%.
- SQNS's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.22, which clearly demonstrates the ability to cover short-term cash needs.
- This stock has increased by 70.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in SQNS do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: SQNS Ratings Report