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"We rate XCERRA CORP (XCRA) a BUY. This is driven by a few notable strengths, 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 solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- XCRA's very impressive revenue growth greatly exceeded the industry average of 10.2%. Since the same quarter one year prior, revenues leaped by 231.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, XCRA has a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs.
- XCERRA CORP 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, XCERRA CORP turned its bottom line around by earning $0.01 versus -$0.26 in the prior year. This year, the market expects an improvement in earnings ($0.91 versus $0.01).
- 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 390.2% when compared to the same quarter one year prior, rising from -$4.66 million to $13.51 million.
- Powered by its strong earnings growth of 370.00% and other important driving factors, this stock has surged by 85.07% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: XCRA Ratings Report
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