Why Microvision (MVIS) Stock Is Soaring Today

NEW YORK (TheStreet) -- Microvision (MVIS) stock popped on Thursday morning after the display screen developer announced its collaboration with an unnamed global consumer electronics brand.

As part of this partnership, Microvision will develop a display engine for use in an innovative smartphone product. The companies plan to collaborate with the goal of introducing the product in the second half of 2015. 

Microvision already has partnership agreements with UPS (UPS) and Sony (SNE). 

In morning trading, shares have spiked 15.3% to $2.03.

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Separately, TheStreet Ratings team rates MICROVISION INC as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MICROVISION INC (MVIS) a SELL. This is based on a variety of negative investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

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

  • 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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 119.4% when compared to the same quarter one year ago, falling from -$3.65 million to -$8.02 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 33.78%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 64.28% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • MICROVISION 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MICROVISION INC continued to lose money by earning -$0.48 versus -$1.15 in the prior year. For the next year, the market is expecting a contraction of 2.1% in earnings (-$0.49 versus -$0.48).
  • 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 Electronic Equipment, Instruments & Components industry and the overall market, MICROVISION INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 9.3%. Since the same quarter one year prior, revenues fell by 32.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
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