Sierra Wireless Inc Stock Upgraded (SWIR)

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) -- Sierra Wireless (Nasdaq: SWIR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 23.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, SWIR's share price has jumped by 57.81%, exceeding the performance of the broader market during that same time frame. 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Communications Equipment industry and the overall market, SIERRA WIRELESS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for SIERRA WIRELESS INC is currently lower than what is desirable, coming in at 32.09%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.10% is significantly below that of the industry average.

Sierra Wireless, Inc., together with its subsidiaries, provides cellular wireless solutions to the machine-to-machine (M2M) and connected device markets in North America, Europe, and the Asia Pacific. Sierra Wireless has a market cap of $631.6 million and is part of the technology sector and telecommunications industry. Shares are down 15% year to date as of the close of trading on Tuesday.

You can view the full Sierra Wireless 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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