The firm lowered its rating on the worldwide electronics manufacturing services and solutions company due to concern over the company's biggest customer, Apple (AAPL), and belief that Jabil's full year 2015 guidance reflects only a best case scenario.
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TheStreet Ratings team rates JABIL CIRCUIT INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate JABIL CIRCUIT INC (JBL) 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 reasonable valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- JBL, with its decline in revenue, underperformed when compared the industry average of 1.6%. Since the same quarter one year prior, revenues fell by 14.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for JABIL CIRCUIT INC is currently extremely low, coming in at 9.18%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.08% trails that of the industry average.
- Net operating cash flow has significantly decreased to $16.91 million or 89.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: JBL Ratings Report