Why Amkor Technology (AMKR) Stock Is Up Today

NEW YORK (TheStreet) -- Amkor Technology (AMKR) stock is gaining Tuesday after the semiconductor equipment company posted better-than-expected quarterly earnings and on favorable second-quarter guidance.

By late afternoon, shares had added 9.6% to $7.75.

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In its first quarter, the company earned 9 cents a share and revenue of $696.04 million. Analysts polled by Thomson Reuters anticipated net income of 3 cents a share and revenue of $678.13 million. 

Management guided for second-quarter revenue between $735 million and $785 million, inline with $761.4 million consensus. Quarterly earnings of 8 cents to 18 cents a share is favorable to analysts' estimates of 12 cents a share. 

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

"We rate AMKOR TECHNOLOGY INC (AMKR) 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, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including poor profit margins and generally higher debt management risk."

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

  • AMKR's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 260.00% and other important driving factors, this stock has surged by 97.88% 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.
  • Currently the debt-to-equity ratio of 1.73 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, AMKR's quick ratio is somewhat strong at 1.45, demonstrating the ability to handle short-term liquidity needs.
  • The gross profit margin for AMKOR TECHNOLOGY INC is currently lower than what is desirable, coming in at 33.51%. Regardless of AMKR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AMKR's net profit margin of 5.40% is significantly lower than the industry average.

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