PLX Technology Inc. Stock Upgraded (PLXT)

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) -- PLX Technology (Nasdaq: PLXT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 51.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • 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 88.8% when compared to the same quarter one year prior, rising from -$5.45 million to -$0.61 million.
  • PLX TECHNOLOGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PLX TECHNOLOGY INC reported poor results of -$0.11 versus -$0.08 in the prior year. This year, the market expects an improvement in earnings ($0.26 versus -$0.11).
  • The gross profit margin for PLX TECHNOLOGY INC is rather high; currently it is at 57.50%. Regardless of PLXT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PLXT's net profit margin of -2.61% significantly underperformed when compared to the industry average.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, PLX TECHNOLOGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
.

PLX Technology, Inc. designs, develops, manufactures, and sells semiconductor devices worldwide. PLX Technology has a market cap of $210.8 million and is part of the technology sector and electronics industry. Shares are up 28.9% year to date as of the close of trading on Wednesday.

You can view the full PLX Technology 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.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE.
null

If you liked this article you might like

Intel Acquires Axxia Chip Business from Avago

Intel Acquires Axxia Chip Business from Avago

Why PLX Technology (PLXT) Stock Is Up Today (Update)

Why PLX Technology (PLXT) Stock Is Up Today (Update)

PLX Technology Inc Stock Upgraded (PLXT)

PLX Technology Inc Stock Upgraded (PLXT)

Nine Buy-Rated Semiconductor Stocks Under $10

Nine Buy-Rated Semiconductor Stocks Under $10

The Deal: OCZ's Going Nowhere Fast

The Deal: OCZ's Going Nowhere Fast