Veeco Instruments Inc Stock Upgraded (VECO)

Editor's Note: 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

NEW YORK ( TheStreet) -- Veeco Instruments (Nasdaq: VECO) 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, reasonable valuation levels, good cash flow from operations, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

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Highlights from the ratings report include:
  • VECO's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.38, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 4286.11% to $18.64 million when compared to the same quarter last year. In addition, VEECO INSTRUMENTS INC has also vastly surpassed the industry average cash flow growth rate of 24.34%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The revenue fell significantly faster than the industry average of 14.0%. Since the same quarter one year prior, revenues fell by 48.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Veeco Instruments Inc., together with its subsidiaries, designs, manufactures, and markets various equipments to make light emitting diodes (LEDs) and hard-disk drives worldwide. The company has a P/E ratio of 13.5, below the average electronics industry P/E ratio of 16.7 and below the S&P 500 P/E ratio of 17.7. Veeco Instruments has a market cap of $1.41 billion and is part of the technology sector and electronics industry. Shares are up 73.2% year to date as of the close of trading on Friday.

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

-- Written by a member of TheStreet Ratings Staff

Editor's Note: 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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