Why Infinera (INFN) Is Gaining Today

NEW YORK (TheStreet) -- Infinera (INFN) was gaining 5.3%to $9.87 Thursday following an upgrade from Stifel Nicolaus.

The analyst firm upgraded Infinera to "buy" from "hold," with a price target of $13. Stifel Nicolaus analysts wrote, "We are upgrading shares of Infinera with a target price of $13. Post our meetings at OFC, we believe that demand for 100G is now on a much more global scale versus a year ago. Specifically, we are seeing upgrades emerge in Europe and parts of Asia, versus being concentrated in North America 12 months ago."

Must read: Warren Buffett's 10 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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

"We rate INFINERA CORP (INFN) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

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

  • INFN's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 8.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although INFN's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.83, which clearly demonstrates the ability to cover short-term cash needs.
  • 44.50% is the gross profit margin for INFINERA CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -7.31% is in-line with the industry average.
  • 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. Compared to other companies in the Communications Equipment industry and the overall market, INFINERA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: INFN Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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.

More from Markets

Jim Cramer: Oil Needs to Go Down to See Worldwide Growth Pick Up

Jim Cramer: Oil Needs to Go Down to See Worldwide Growth Pick Up

Jim Cramer on the Problem With the Case for More Rate Hikes

Jim Cramer on the Problem With the Case for More Rate Hikes

Video: Jim Cramer on Fed Rate Hikes, Oil Prices and Starbucks Worries

Video: Jim Cramer on Fed Rate Hikes, Oil Prices and Starbucks Worries

'Strong Case for More Rate Hikes,' Says Fed Chair Jerome Powell

'Strong Case for More Rate Hikes,' Says Fed Chair Jerome Powell

Fed Chief Uncertain About Policy-Making as Unemployment Hits 18-Year Low

Fed Chief Uncertain About Policy-Making as Unemployment Hits 18-Year Low