NEW YORK ( TheStreet) -- Intevac (Nasdaq: IVAC) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 Computers & Peripherals industry. The net income has significantly decreased by 146.4% when compared to the same quarter one year ago, falling from $13.18 million to -$6.12 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, INTEVAC INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of INTEVAC INC has not done very well: it is down 20.30% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • INTEVAC INC 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 reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, INTEVAC INC turned its bottom line around by earning $1.23 versus -$0.45 in the prior year. For the next year, the market is expecting a contraction of 167.9% in earnings (-$0.84 versus $1.23).
  • IVAC, with its very weak revenue results, has greatly underperformed against the industry average of 38.1%. Since the same quarter one year prior, revenues plummeted by 70.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Intevac, Inc. provides manufacturing equipment and solutions to the hard disk drive industry; and offers productivity solutions to the photovoltaic and semiconductor industries. The company operates in two segments, Equipment and Intevac Photonics. The company has a P/E ratio of 41.6, equal to the average electronics industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Intevac has a market cap of $190.6 million and is part of the technology sector and electronics industry. Shares are down 42.5% year to date as of the close of trading on Tuesday.

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