Xilinx Inc Stock Buy Recommendation Reiterated (XLNX)

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) -- Xilinx (Nasdaq: XLNX) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

  • 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:
  • The gross profit margin for XILINX INC is rather high; currently it is at 69.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.33% is above that of the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.33, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 5.72 is very high and demonstrates very strong liquidity.
  • Despite the weak revenue results, XLNX has outperformed against the industry average of 17.0%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, XLNX has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • 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, XILINX INC's return on equity exceeds that of both the industry average and the S&P 500.

Xilinx, Inc. designs, develops, and markets programmable platforms worldwide. Xilinx has a market cap of $9.3 billion and is part of the technology sector and electronics industry. The company has a P/E ratio of 20.00, above the S&P 500 P/E ratio of 18.00. Shares are down 0.7% year to date as of the close of trading on Friday.

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

--Written by a member of TheStreet Ratings Staff.

Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.
null

If you liked this article you might like

Which Chip Companies Could Be Acquired Next?

Which Chip Companies Could Be Acquired Next?

Will the S&P 500 Soon Explode Higher Another 25% or Completely Fall Apart?

Will the S&P 500 Soon Explode Higher Another 25% or Completely Fall Apart?

What Was Behind Intel's Very Solid Quarter

What Was Behind Intel's Very Solid Quarter

There Is Good and a Lot of Bad in General Electric Earnings

There Is Good and a Lot of Bad in General Electric Earnings

Jim Cramer: The 3 Best Sectors That Lifted the Stock Market

Jim Cramer: The 3 Best Sectors That Lifted the Stock Market