Xilinx (XLNX) Stock Is Up in After-Hours Trading After Buyback Announcement

NEW YORK (TheStreet) -- Shares of Xilinx (XLNX) were gaining 1.5% to $44.05 after-hours Monday after the chipmaker announced a new buyback plan.

Xilinx's board of directors authorized the company to repurchase up to $800 million worth of common stock. The buyback plan will let the company repurchase about 7% of all outstanding shares at its current stock price.

"Our repurchase authorization signals a high level of confidence in Xilinx's growth prospects as well as in our continued ability to consistently generate healthy operating cash flow," Xilinx president and CEO Moshe Gavrielov said in a statement.

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Xilinx previously repurchased about 50 million shares for about $1.6 billion since fiscal 010.

TheStreet Ratings team rates XILINX INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate XILINX INC (XLNX) 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, revenue growth, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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

  • XILINX INC has improved earnings per share by 26.5% 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, XILINX INC increased its bottom line by earning $2.19 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($2.47 versus $2.19).
  • XLNX's revenue growth trails the industry average of 18.6%. Since the same quarter one year prior, revenues slightly increased by 0.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, XILINX INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for XILINX INC is currently very high, coming in at 74.19%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.38% is above that of the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.97 is very high and demonstrates very strong liquidity.
  • You can view the full analysis from the report here: XLNX Ratings Report

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