One Factor Driving RF Micro Devices (RFMD) Stock to a One-Year High Today

NEW YORK (TheStreet) -- Shares of RF Micro Devices  (RFMD) hit a 52-week high of $12.30 on Friday after peer RF component company Avago Technologies AVGO received price target increases from numerous analysts.

Avago reported a third-quarter earnings beat and strong fourth-quarter outlook on Thursday. The positive report and analyst upgrades led Avago's fellow companies higher in Friday trading.

The stock was up 4.44% to $12.28 at 11:13 a.m.

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Separately, TheStreet Ratings team rates RF MICRO DEVICES INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate RF MICRO DEVICES INC (RFMD) a BUY. This is driven by several positive factors, 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 impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and expanding profit margins. 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:

  • RF MICRO DEVICES 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 two years. We feel that this trend should continue. During the past fiscal year, RF MICRO DEVICES INC turned its bottom line around by earning $0.05 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.05).
  • 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 2375.8% when compared to the same quarter one year prior, rising from $1.56 million to $38.65 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 8.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 400.63% to $36.26 million when compared to the same quarter last year. In addition, RF MICRO DEVICES INC has also vastly surpassed the industry average cash flow growth rate of -8.94%.
  • The gross profit margin for RF MICRO DEVICES INC is rather high; currently it is at 50.92%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 12.21% trails the industry average.
  • You can view the full analysis from the report here: RFMD 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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