Will This Downgrade Hurt Advanced Energy Industries (AEIS) Stock Today?

NEW YORK (TheStreet) -- Advanced Energy Industries (AEIS) stock has been downgraded to "hold" from "buy," Needham said Tuesday. The downgrade follows from Monday's announcement that Garry Rogerson had resigned as CEO. The firm said a number of executive departures in such a short time could negatively impact the business. 

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Separately, TheStreet Ratings team rates ADVANCED ENERGY INDS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ADVANCED ENERGY INDS INC (AEIS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • The revenue growth came in higher than the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 26.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AEIS's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AEIS has a quick ratio of 2.21, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ADVANCED ENERGY INDS INC 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 year. We feel that this trend should continue. During the past fiscal year, ADVANCED ENERGY INDS INC increased its bottom line by earning $0.78 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($1.54 versus $0.78).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 115.6% when compared to the same quarter one year prior, rising from $6.83 million to $14.72 million.
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