Why Sony (SNE) Is Gaining Today

NEW YORK (TheStreet) -- Sony (SNE) was gaining 0.9% to $17.31 Wednesday following the announcement of Project Morpheus, a virtual reality headset for the PlayStation 4.

The company announced the virtual reality headset at a presentation at the Game Developers Conference  in San Francisco Tuesday night. The project is similar to other headsets such as the Oculus Rift, which promises to come to the PC later this year.

Sony's Project Morpheus has a 1080p display with a field of view of about 90 degrees. The headset also has sensors that can track the movement of the player's head so gamers can "look" around virtual worlds without having to interact with a thumbstick on a controller.

There is no announced release date for Project Morpheus.

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TheStreet Ratings team rates SONY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SONY CORP (SNE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

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

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 468.6% when compared to the same quarter one year prior, rising from -$72.42 million to $266.97 million.
  • SNE's revenue growth trails the industry average of 28.9%. Since the same quarter one year prior, revenues rose by 11.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to the other companies in the Household Durables industry and the overall market, SONY CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for SONY CORP is currently extremely low, coming in at 7.87%. Regardless of SNE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.29% trails the industry average.
  • You can view the full analysis from the report here: SNE Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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