NEW YORK ( TheStreet) -- Advantest (NYSE: ATE) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and unimpressive growth in net income. Highlights from the ratings report include:
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 42.48%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 60.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 51.8% when compared to the same quarter one year ago, falling from $8.91 million to $4.29 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ADVANTEST CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ADVANTEST CORP is rather high; currently it is at 51.80%. Regardless of ATE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ATE's net profit margin of 1.30% is significantly lower than the same period one year prior.
- ADVANTEST CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ADVANTEST CORP turned its bottom line around by earning $0.21 versus -$0.68 in the prior year.