Why Rubicon Technology (RBCN) Stock Is Soaring Today

NEW YORK (TheStreet) -- Shares of sapphire glass supplier Rubicon Technology, Inc. (RBCN) are up 6.88% to $4.28 after GT Advanced Technologies Inc (GTAT) unexpectedly filed for Chapter 11 bankruptcy yesterday.

The company could now become the scratch-resistant sapphire screen display supplier to Apple (AAPL) after its former supplier went out of business.

Rubicon Technology said it can "make rectangular blocks ready to be sliced into smartphone face plates and custom shapes such as smart-watch face plates."

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More than 2.08 million shares were traded at 3:40 p.m. on Tuesday, compared to the average trading volume of about 752,354 shares a day.

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

"We rate RUBICON TECHNOLOGY INC (RBCN) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."

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

  • RUBICON TECHNOLOGY INC's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, RUBICON TECHNOLOGY INC reported poor results of -$1.34 versus -$0.25 in the prior year. For the next year, the market is expecting a contraction of 19.4% in earnings (-$1.60 versus -$1.34).
  • 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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 69.4% when compared to the same quarter one year ago, falling from -$5.89 million to -$9.98 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, RUBICON TECHNOLOGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$2.47 million or 133.67% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 59.25%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% 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.
  • You can view the full analysis from the report here: RBCN Ratings Report

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