One Factor Bringing RADA Electronics (RADA) Stock Up

NEW YORK (TheStreet) -- Shares of RADA Electronics Industries (RADA) were gaining 3.1% to $1.01 on heavy trading volume Wednesday after the company announced the Israeli Ministry of Defense procured its tactical radars.

The company said the Israeli Ministry of Defense procured the radars for "the protection of communities adjacent to Israel's southern border against short range threats, including rocket and mortar fires and aerial threats."

"We are very proud of the selection of our systems for the important task of protecting the lives of the residents near the southern border," RADA CEO Zvi Alon said in a statement. "This program is the latest of strategic programs in which our radars are taking part, and were announced over the past few months, strengthening the global recognition of our unique radar offering."

RADA also announced that it is expanding its Multi-Mission Hemispheric Radar family with three new variants in different sizes and ranges for air and surface surveillance.

About 1.4 million shares of RADA were traded by 9:54 a.m. Wednesday, above the company's average trading volume of about 409,000 shares a day.

TheStreet Ratings team rates RADA ELECTRONIC INDS as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate RADA ELECTRONIC INDS (RADA) a SELL. This is driven by a number of negative factors, 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 deteriorating net income, disappointing return on equity and poor profit margins."

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

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 621.1% when compared to the same quarter one year ago, falling from $0.38 million to -$2.00 million.
  • 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, RADA ELECTRONIC INDS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for RADA ELECTRONIC INDS is rather low; currently it is at 16.73%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -49.09% is significantly below that of the industry average.
  • The revenue fell significantly faster than the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 36.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • RADA ELECTRONIC INDS 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 not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, RADA ELECTRONIC INDS turned its bottom line around by earning $0.03 versus -$0.29 in the prior year.
  • You can view the full analysis from the report here: RADA Ratings Report

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