NEW YORK (TheStreet) -- Shares of Neonode (NEON) are up 21.66% to $3.08 on heavy trading volume as the touch screen technology provider is expected to launch a touch technology for PC products at the Consumer Electronics Show (CES) in January, which could be a major trigger for its stock, say Cowen & Co analysts.
Stockholm-based Neonode and fellow Swedish company Autoliv (ALV) , a supplier of automotive safety systems, will introduce the first joint concept "zForce DRIVE - Active Sensor Steering Wheel," which is based on Neonode zForce AIR technology, at CES 2015, January 6 - 9 in Las Vegas.
"The market is on the precipice of a 'touch' paradigm shift, and I believe our latest Touch technologies will be a key enabler of touch devices within the PC and Automotive markets," Neonode CEO Thomas Eriksson said.
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About 2.53 million shares changed hands by 2:08 p.m. in New York, compared to the average of 359,602 shares.
Separately, TheStreet Ratings team rates NEONODE INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEONODE INC (NEON) a SELL. This is driven by some concerns, 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 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:
- 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 Electronic Equipment, Instruments & Components industry and the overall market, NEONODE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$3.04 million or 25.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- NEON's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 55.71%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income increased by 2.9% when compared to the same quarter one year prior, going from -$3.34 million to -$3.25 million.
- NEONODE INC has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEONODE INC reported poor results of -$0.37 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings (-$0.36 versus -$0.37).
- You can view the full analysis from the report here: NEON Ratings Report