NEW YORK ( TheStreet) -- Cascade Microtech (Nasdaq: CSCD) has been upgraded by TheStreet Ratings from sell to hold. 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 and revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- CASCADE MICROTECH INC reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, CASCADE MICROTECH INC continued to lose money by earning -$0.26 versus -$0.57 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus -$0.26).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 440.8% when compared to the same quarter one year prior, rising from $0.27 million to $1.44 million.
- CSCD's revenue growth trails the industry average of 26.4%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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, CASCADE MICROTECH INC's return on equity significantly trails that of both the industry average and the S&P 500.
- CSCD's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 35.77%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
-- Written by a member of TheStreet RatingsStaff