NEW YORK (TheStreet) -- InvenSense Inc. was downgraded today to "sector perform" by Pacific Crest Securitiesaafter second quarter earnings for the fiscal year 2015 came up short. "More things went wrong than right," analysts said, referring to earnings results reported yesterday. "Misexecution, price pressures and risk of share loss significantly reduce our confidence in sustainable growth," analysts said, adding, "Furthermore, we anticipate lower gross margin will contract valuation multiples." Must Read: Warren Buffett's 25 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Shares of InvenSense are down 24.81% to $16.15 after the micro-electro-mechanical systems designer reported second-quarter results that came up short of analysts' expectations. The company reported adjusted earnings per share of 5 cents, down from 21 cents in the same period one year earlier. Revenue increased year-over-year to $90.2 million from $70.9 million.aThe consensus estimate called for earnings of 16 cents a share on revenue of $90.48 million. Separately, TheStreet Ratings team rates INVENSENSE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: "We rate INVENSENSE INC (INVN) 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 robust revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 19.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. Net operating cash flow has slightly increased to $6.69 million or 4.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.19%. Despite currently having a low debt-to-equity ratio of 0.43, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 5.99 is very high and demonstrates very strong liquidity. 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 146.8% when compared to the same quarter one year ago, falling from $10.32 million to -$4.83 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, INVENSENSE INC'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: INVN Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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