Xilinx (XLNX) Stock Rising on Analyst Upgrade

NEW YORK (TheStreet) -- Shares of Xilinx (XLNX) are gaining 0.21% to $46.71 after analysts at Pacific Crest Securities today upgraded the company to "overweight" from "sector weight" with a price target of $60.

"We view the breakdown in Dennard scaling and Dark Silicon represent a significant opportunity for FPGAs, particularly in the data center," analysts said.

The company makes field-programmable gate arrays (FPGA) which is a semiconductor device.

Analysts added that particularly in the data centers they see a large growth opportunity for the FPGAs to significantly improve compute performance at marginal costs.

Xilinx is an American technology company that designs and develops programmable devices and associated technologies worldwide.

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

"We rate XILINX INC (XLNX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

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

  • The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with this, the company maintains a quick ratio of 3.69, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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 72.49%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.74% is above that of the industry average.
  • XLNX, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 8.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • XILINX INC's earnings per share declined by 5.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, XILINX INC increased its bottom line by earning $2.36 versus $2.19 in the prior year. For the next year, the market is expecting a contraction of 4.9% in earnings ($2.25 versus $2.36). 
  • You can view the full analysis from the report here: XLNX Ratings Report

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