NEW YORK (TheStreet) -- Trimble Navigation (TRMB) - Get Report fell Wednesday after Janney Capital downgraded the GPS receiver manufacturer to "neutral" from "buy" and reduced its price target to $36 from $40.
The firm cited the company's decreased growth outlook as its precision ag hardware business matures.
The stock was down 8.19% to $34.30 at 3:22 p.m.
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TheStreet Ratings team rates TRIMBLE NAVIGATION LTD as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TRIMBLE NAVIGATION LTD (TRMB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TRIMBLE NAVIGATION LTD has improved earnings per share by 36.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TRIMBLE NAVIGATION LTD increased its bottom line by earning $0.84 versus $0.75 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $0.84).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income increased by 37.8% when compared to the same quarter one year prior, rising from $49.81 million to $68.62 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 8.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TRMB's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for TRIMBLE NAVIGATION LTD is rather high; currently it is at 58.76%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.34% is above that of the industry average.
- You can view the full analysis from the report here: TRMB Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.