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. NEW YORK ( TheStreet) -- Applied Micro Circuits (Nasdaq: AMCC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- Powered by its strong earnings growth of 215.38% and other important driving factors, this stock has surged by 38.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- APPLIED MICRO CIRCUITS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, APPLIED MICRO CIRCUITS CORP continued to lose money by earning -$0.10 versus -$2.04 in the prior year. This year, the market expects an improvement in earnings ($0.27 versus -$0.10).
- The gross profit margin for APPLIED MICRO CIRCUITS CORP is rather high; currently it is at 66.66%. Regardless of AMCC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMCC's net profit margin of 44.65% significantly outperformed against the industry.
- 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 Semiconductors & Semiconductor Equipment industry and the overall market, APPLIED MICRO CIRCUITS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$10.04 million or 374.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.