Lattice Semiconductor Corporation Stock Downgraded (LSCC)

NEW YORK ( TheStreet) -- Lattice Semiconductor Corporation (Nasdaq: LSCC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • LSCC 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 4.56, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for LATTICE SEMICONDUCTOR CORP is rather high; currently it is at 62.10%. Regardless of LSCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LSCC's net profit margin of -10.80% significantly underperformed when compared to the industry average.
  • Net operating cash flow has significantly decreased to -$9.94 million or 1072.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 170.6% when compared to the same quarter one year ago, falling from $10.92 million to -$7.71 million.

Lattice Semiconductor Corporation designs, develops, manufactures, and markets programmable logic products and related software. The company has a P/E ratio of 7.4, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Lattice Semiconductor has a market cap of $430.6 million and is part of the technology sector and electronics industry. Shares are down 38.6% year to date as of the close of trading on Thursday.

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

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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