Why TriQuint Semiconductor (TQNT) Stock Is Up Today

NEW YORK (TheStreet) -- TriQuint Semiconductor (TQNT) was gaining 2.4% to $18.59 Tuesday after announcing it's the first gallium nitride (GaN) RF chip manufacturer to reach Manufacturing Readiness Level (MRL) 9.

Reaching MRL 9 means TriQuint's GaN manufacturing processes "have met full performance, cost, and capacity goals," and that it is capable of supporting full rate production, the company said in a press release. TriQuint used the U.S. Air Force Research Laboratory's manufacturing readiness assessment tools and criteria to benchmark the achievement.

By developing GaN-based devices TriQuint is able to produce smaller, more efficient power amplifiers for use in military radar, electronic warfare programs, and commercial wireless communications.

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

"We rate TRIQUINT SEMICONDUCTOR INC (TQNT) 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, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

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

  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 21.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TQNT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.06, which clearly demonstrates the ability to cover short-term cash needs.
  • TRIQUINT SEMICONDUCTOR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TRIQUINT SEMICONDUCTOR INC reported poor results of -$0.23 versus -$0.16 in the prior year. This year, the market expects an improvement in earnings ($0.53 versus -$0.23).
  • 40.17% is the gross profit margin for TRIQUINT SEMICONDUCTOR INC which we consider to be strong. Regardless of TQNT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TQNT's net profit margin of 2.25% is significantly lower than the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, TRIQUINT SEMICONDUCTOR INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: TQNT Ratings Report

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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.

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