NEW YORK (TheStreet) -- Integrated Silicon Solution (ISSI) shares are down 0.78% to $20.29 in trading on Wednesday after the company agreed to merger terms with Cypress Semiconductor (CY) and finalized an agreement to be acquired by the rival semiconductor company.
Following the agreement, other firms looking to acquire ISSI like Chinese private equity firm Uphill Investment have four days to outbid Cypress' offer of $672 million or $20.25 per share.
Uphill's original offer of $639 million or $19.25 was topped by Cypress which said that it will comply with regulator's conditions for the merger's approval.
Cypress Semiconductor shares are up 4.37% to $13.16 in trading today.
TheStreet Ratings team rates INTEGRATED SILICON SOLUTION as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTEGRATED SILICON SOLUTION (ISSI) a BUY. This is driven by multiple 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 largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. 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:
- ISSI's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ISSI has a quick ratio of 2.49, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 172.91% to $2.55 million when compared to the same quarter last year. In addition, INTEGRATED SILICON SOLUTION has also vastly surpassed the industry average cash flow growth rate of 19.77%.
- 37.94% is the gross profit margin for INTEGRATED SILICON SOLUTION 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, ISSI's net profit margin of 1.39% significantly trails the industry average.
- Compared to its closing price of one year ago, ISSI's share price has jumped by 42.21%, exceeding the performance of the broader market during that same time frame. 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.
- INTEGRATED SILICON SOLUTION has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, INTEGRATED SILICON SOLUTION increased its bottom line by earning $0.74 versus $0.59 in the prior year. This year, the market expects an improvement in earnings ($0.87 versus $0.74).
- You can view the full analysis from the report here: ISSI Ratings Report