Why Lattice Semiconductor (LSCC) Is Up Today

NEW YORK (TheStreet) -- Lattice Semiconductor (LSCC) was gaining 13% to $6.70 on Friday following an earnings report that beat profit and revenue estimates, and a first-quarter guidance that calls for revenue above consensus estimates.

In its fourth-quarter earnings report Lattice Semiconductor reported earnings of 6 cents a share, beating estimates by 2 cents. The semiconductor company posted revenue of $89.5 million, while analysts polled by Thomson Reuters estimated revenue of $81.1 million for the quarter.

Lattice Semiconductor's first-quarter guidance calls for revenue to be flat, plus or minus 2% in relation to the fourth quarter. Analyst estimates call for revenue of $84.4 million in the first quarter.

Must read: Why I Remain Bullish On EZchip Semiconductor

TheStreet Ratings team rates LATTICE SEMICONDUCTOR CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LATTICE SEMICONDUCTOR CORP (LSCC) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, increase in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 22.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LSCC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.25, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 506.6% when compared to the same quarter one year prior, rising from -$2.18 million to $8.84 million.
  • Net operating cash flow has significantly increased by 244.78% to $43.23 million when compared to the same quarter last year. In addition, LATTICE SEMICONDUCTOR CORP has also vastly surpassed the industry average cash flow growth rate of -75.92%.
  • Powered by its strong earnings growth of 500.00% and other important driving factors, this stock has surged by 31.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • You can view the full analysis from the report here: LSCC Ratings Report

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