NEW YORK ( TheStreet) -- Integrated Device Technology (Nasdaq: IDTI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its 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 lackluster performance in the stock itself. Highlights from the ratings report include:
- IDTI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.86, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for INTEGRATED DEVICE TECH INC is rather high; currently it is at 54.90%. Regardless of IDTI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 10.70% trails the industry average.
- INTEGRATED DEVICE TECH 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. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, INTEGRATED DEVICE TECH INC reported lower earnings of $0.26 versus $0.61 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus $0.26).
- The revenue fell significantly faster than the industry average of 20.1%. Since the same quarter one year prior, revenues fell by 17.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of INTEGRATED DEVICE TECH INC has not done very well: it is down 16.72% 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. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
-- Written by a member of TheStreet RatingsStaff