Rubicon Technology Inc Stock Downgraded (RBCN)

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) -- Rubicon Technology (Nasdaq: RBCN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.

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Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 222.7% when compared to the same quarter one year ago, falling from -$3.38 million to -$10.89 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, RUBICON TECHNOLOGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • RUBICON TECHNOLOGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, RUBICON TECHNOLOGY INC reported poor results of -$1.34 versus -$0.25 in the prior year. This year, the market expects an improvement in earnings (-$1.25 versus -$1.34).
  • In its most recent trading session, RBCN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • Net operating cash flow has increased to -$4.47 million or 35.78% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.12%.

Rubicon Technology, Inc. develops, manufactures, and sells monocrystalline sapphire and other crystalline products for light-emitting diodes (LED), radio frequency integrated circuits (RFICs), blue laser diodes, optoelectronics, and other optical applications. Rubicon Technology has a market cap of $200.6 million and is part of the technology sector and electronics industry. Shares are down 24.6% year to date as of the close of trading on Thursday.

You can view the full Rubicon Technology Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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