Why Lightbridge (LTBR) Is Surging Today

NEW YORK (TheStreet) -- Lightbridge  (LTBR) was spiking 29% to $2.98 on Tuesday morning after the nuclear energy company announced that the United States Patent and Trademark Office had approved and issued a key patent for the company's multi-lobed metallic fuel rod design and fuel assemblies.

"This new patent is the single most important patent in Lightbridge's intellectual property portfolio and is crucial to the Company's future royalty revenue stream," said President and CEO Seth Grae in a statement. "We now have very broad protection for the metal fuel element that will be used in all of our fuel assembly designs. Moreover, this successful outcome secures patent protection in the U.S. -- the world's largest market of pressurized water reactors currently in operation."

Uranium oxide pellets in zirconium alloy tubes typically make up fuel rods, but Lightbridge's proprietary multi-lobed metallic fuel rods are a solid uranium-zirconium alloy that are thrust out in full-size lengths of 12 to 14 feet.

TheStreet Ratings team rates LIGHTBRIDGE CORP as a "sell" with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIGHTBRIDGE CORP (LTBR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, disappointing return on equity, poor profit margins and weak operating cash flow."

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

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Professional Services industry. The net income has decreased by 5.8% when compared to the same quarter one year ago, dropping from -$1.25 million to -$1.32 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Professional Services industry and the overall market, LIGHTBRIDGE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for LIGHTBRIDGE CORP is currently lower than what is desirable, coming in at 25.44%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -780.47% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$1.28 million or 75.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LTBR, with its very weak revenue results, has greatly underperformed against the industry average of 18.0%. Since the same quarter one year prior, revenues plummeted by 71.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: LTBR Ratings Report

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