NEW YORK ( TheStreet) -- Cascade Microtech (Nasdaq: CSCD) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to -$2.68 million or 29.35% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • In its most recent trading session, CSCD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CASCADE MICROTECH INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CASCADE MICROTECH INC has improved earnings per share by 30.0% 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, CASCADE MICROTECH INC reported poor results of -$0.73 versus -$0.58 in the prior year. This year, the market expects an improvement in earnings (-$0.25 versus -$0.73).
  • 42.50% is the gross profit margin for CASCADE MICROTECH INC which we consider to be strong. 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 -7.40% is in-line with the industry average.

Cascade Microtech, Inc. designs, develops, manufactures, and markets wafer probing and test socket solutions for the electrical measurement and testing of high performance chips. Cascade Microtech has a market cap of $56 million and is part of the consumer goods sector and consumer durables industry. Shares are down 9.4% year to date as of the close of trading on Thursday.

You can view the full Cascade Microtech Ratings Report or get investment ideas from our investment research center.
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