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"We rate ADVANTEST CORP (ATE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
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 149.0% when compared to the same quarter one year prior, rising from -$58.32 million to $28.59 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.3%. Since the same quarter one year prior, revenues rose by 17.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for ADVANTEST CORP is rather high; currently it is at 57.19%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ATE's net profit margin of 8.02% significantly trails the industry average.
- In its most recent trading session, ATE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, ADVANTEST CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ATE Ratings Report
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