Story updated at 10 a.m. to reflect market activity.
Maxim fell 0.4% to $32.87 in morning trading.
The firm raised its price target for the chipmaker to $40 from $35. Analysts Atif Malik and Amanda Scamati said the upgrade was due to new product design wins.
"MXIM has gained $ content in the Samsung S5 (biosensor) and is looking to build upon its audio amplifier win in the iPad Air for Apple's (AAPL) - Get Apple Inc. (AAPL) Report next gen iPhone 6," the analysts wrote.
Separately, TheStreet Ratings team rates MAXIM INTEGRATED PRODUCTS as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAXIM INTEGRATED PRODUCTS (MXIM) 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 revenue growth, notable return on equity, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MXIM's revenue growth has slightly outpaced the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 2.5%. 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.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MAXIM INTEGRATED PRODUCTS's return on equity exceeds that of both the industry average and the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.43, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.77 is very high and demonstrates very strong liquidity.
- MAXIM INTEGRATED PRODUCTS's earnings per share declined by 42.3% 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, MAXIM INTEGRATED PRODUCTS increased its bottom line by earning $1.52 versus $1.17 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $1.52).
- The gross profit margin for MAXIM INTEGRATED PRODUCTS is rather high; currently it is at 64.68%. Regardless of MXIM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MXIM's net profit margin of 7.15% is significantly lower than the industry average.
- You can view the full analysis from the report here: MXIM 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.