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 increase in stock price during the past year, increase in net income, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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 net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Semiconductors & Semiconductor Equipment industry average. The net income increased by 6.7% when compared to the same quarter one year prior, going from $122.41 million to $130.62 million.
- XILINX INC has improved earnings per share by 6.8% 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, XILINX INC reported lower earnings of $1.78 versus $1.94 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus $1.78).
- Despite currently having a low debt-to-equity ratio of 0.31, 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 5.03 is very high and demonstrates very strong liquidity.
- The gross profit margin for XILINX INC is rather high; currently it is at 68.70%. Regardless of XLNX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, XLNX's net profit margin of 24.54% compares favorably to the industry average.
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