One Reason Freescale Semiconductor (FSL) Stock Is Up Today

NEW YORK (TheStreet) -- Shares of Freescale Semiconductor (FSL) were gaining 5.6% to $24.74 Friday after Evercore upgraded its rating for the broad line chipmaker.

Evercore upgraded Freescale Semiconductor to "buy" from "hold," saying it expects the company to see strong automotive and general purpose microcontroller sales over the next two years. The analyst firm also raised its price target for the company to $30 from $20.

On Tuesday Freescale Semiconductor announced that it acquired fabless semiconductor company Zenverge, known for its advanced HD content processing ICs. The acquisition will "significantly enhance Freescale's content processing, storage and interoperability capabilities for a range of Video Internet of Things applications and markets," according to the company.

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TheStreet Ratings team rates FREESCALE SEMICONDUCTOR LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate FREESCALE SEMICONDUCTOR LTD (FSL) a BUY. This is driven by a number of 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 compelling growth in net income, revenue growth, good cash flow from operations, expanding profit margins 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."

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

  • 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 443.5% when compared to the same quarter one year prior, rising from $23.00 million to $125.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.6%. Since the same quarter one year prior, revenues rose by 11.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 206.25% to $196.00 million when compared to the same quarter last year. In addition, FREESCALE SEMICONDUCTOR LTD has also vastly surpassed the industry average cash flow growth rate of 11.52%.
  • 49.96% is the gross profit margin for FREESCALE SEMICONDUCTOR LTD which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, FSL's net profit margin of 10.30% significantly trails the industry average.
  • Powered by its strong earnings growth of 344.44% and other important driving factors, this stock has surged by 49.38% 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: FSL Ratings Report

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