Investor's Business Daily: Breaking News: "Investors have taken note. In the past 12 months, shares of Freescale (FSL) have climbed more than 75% while the Philadelphia Semiconductor Index ($SOX) has risen just over 20%.
Now, however, analysts are beginning to wonder how long the honeymoon can last beyond its July 2004 initial public offering.
Although the Austin, Tex.-based company has proven it can make chips with wide profit margins, Freescale needs to now show it can post better revenue growth, they say. That's because the gross margin story -- pitched by Freescale during pre-IPO road shows and heeded by the bulls -- may be losing steam.
'We think investors are poised to pay more attention to sales dynamics than to rely solely on gross margin,' Shawn Slayton, an SG Cowen analyst, wrote in a recent research note.
And on Thursday, Goldman Sachs cut its rating on Freescale to neutral, arguing that the stock price may have peaked. The stock, which fell nearly 2% after that downgrade, ended the session at $24.60, leaving it down more than 7% this month."
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