Exar Corporation Stock Upgraded (EXAR)

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) -- Exar Corporation (Nasdaq: EXAR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 4.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • EXAR's debt-to-equity ratio is very low at 0.01 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 5.89, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 127.27% and other important driving factors, this stock has surged by 47.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, EXAR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • EXAR CORP 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. During the past fiscal year, EXAR CORP continued to lose money by earning -$0.64 versus -$0.80 in the prior year. This year, the market expects an improvement in earnings ($0.27 versus -$0.64).
  • 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 132.2% when compared to the same quarter one year prior, rising from -$4.73 million to $1.52 million.
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Exar Corporation engages in the design, development, and marketing of high performance analog and mixed-signal integrated circuits (ICs) and sub-system solutions for data and telecommunications, networking and storage, industrial control, and consumer applications. Exar has a market cap of $440.5 million and is part of the technology sector and electronics industry. Shares are up 7.8% year to date as of the close of trading on Friday.

You can view the full Exar 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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