AMD Stock Rated "Sell" by TheStreetRatings Team

Discussion in 'Industry News' started by Dyre Straits, Mar 5, 2015.

  1. Dyre Straits

    Dyre Straits 10 Grandkids -2 Great-grandsons

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    http://www.thestreet.com/story/1303...icro-devices-amd-stock-closed-down-today.html

    A snippet from the article....
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    Separately, TheStreet Ratings team rates ADVANCED MICRO DEVICES as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

    "We rate ADVANCED MICRO DEVICES (AMD) a SELL. This is driven by some concerns, 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, poor profit margins, generally high debt management risk and generally disappointing historical performance in the stock itself."
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    And this longer quote....
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    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 Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 509.0% when compared to the same quarter one year ago, falling from $89.00 million to -$364.00 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 Semiconductors & Semiconductor Equipment industry and the overall market, ADVANCED MICRO DEVICES's return on equity significantly trails that of both the industry average and the S&P 500.

    The gross profit margin for ADVANCED MICRO DEVICES is currently lower than what is desirable, coming in at 32.61%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -29.37% is significantly below that of the industry average.

    The debt-to-equity ratio is very high at 11.83 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, AMD's quick ratio is somewhat strong at 1.29, demonstrating the ability to handle short-term liquidity needs.

    The share price of ADVANCED MICRO DEVICES has not done very well: it is down 25.00% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
     
  2. Dyre Straits

    Dyre Straits 10 Grandkids -2 Great-grandsons

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    Things have looked very dour for AMD many times in the past. It's anyone's guess, though, whether or not there is enough "coal in the fire" for them to pull out of this latest tailspin. The very lack of updated GPU drivers has caused a lot of concern among the users of the AMD GPUs.
     
  3. IvanV

    IvanV HH Assassin Guild Member

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    I bumped into a list of Nvidia's releases the other day (in an Nvidia driver topic, so it shouldn't be biased) according to which Nvidia has had a break of a similar duration in driver releases last year, and another the year before and no one raised an eyebrow or said that the company was in trouble. AMD does this for the first time in over 10 years, and suddenly it is the end of the world.

    I wouldn't want this to become a regular occurrence, but AMD made at least a couple of betas near the end of the last year, followed by a hugely successful WHQL release ("Omega", which doubled the performance in AC Unity for GCN cards, for instance). If they take a break similar to this one again this year, I'll be worried, but so far, this is a non-issue for me.

    AMD has a big problem in the GPU market that it overhyped their next generation to the point that people have all but stopped buying their cards late last year waiting for the 300 series, which are to be released "any day now". I don't know what the deal is with the consoles, but my guess is that at least that is helping them some. On a side note, the GPU market is moving a lot more slowly these days (there usually seems to be around 18 months between the new flagships), so "in 6 months" can be qualified as "soon".

    In the CPU arena, AMD can't compete except by giving away it's 8 core CPUs for the price of Core i3. That's a huge problem. They need to increase their ipc (per core) and they need to get their hands on a finer manufacturing process. They need both of these things badly and one of them, the matter of anyone being able to achieve manufacturing processes comparable to those of Intel, is completely out of their hands now that they are fab-less.
     
  4. Judas

    Judas Obvious Closet Brony Pony

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    Aside from a few partners that have barely mentioned anything until recently, no one at AMD has been hyping the next GPUs at all, I've not seen a single shred of tangeable evidence to suggest it.

    The other issue however pertains to something that happened before, when ATI was involved with microsoft to develope the gpu for the xbox, desktop add-in cards stagnated identically, the HD 2900xtx flopped horribly and the amount of hype surrounding that card was unmeasurable until now. Which somewhat worries me as the same huge bit depth of memory is being applied again.

    The other fact is the amount of AMD bashing going on, even with the gtx 970's issue, the amount of blind faith in nvidia is astounding. It's just as incredible how so many users out there don't even give amd a single bit of notice and far as they see it there is only one gpu manufacturer, being nvidia. You so much as mention any of AMD's offerings and the amount of non-sense and totally disinformation spewed is incredible.

    Nvidia has insane marketing, they abuse the hell out of their strength. It's rather impressive considering the questionable ethical measures they have always taken. AMD how little to no advertising or marketing, mostly because they can't afford it as they would rather invest in R&D.

    The other matter is that AMD pretty much only has their aging server cpus and majority of the crutch is their GPU department. If this new gpu doesn't manage to thwap the 980 good and hard in almost every department for whatever pricetag they put on it, they'll have a problem.

    Even many retail and e-retailers stock little to no amd gpu products.... my supplier of all have count them, 5 amd gpus...... that i can purchase, special order otherwise and aren't cheap. However they have over 100 nvidia gpus on hand many of which are the same gpu in different brand flavors. It's insane.

    The other issue is that nvidia has a buttload of cash to stuff into developer pockets. Even still today there are reports of games being exclusively developed on nvidia products without them ever even bothering to test it on an AMD product... It's insane.

    AMD is an underdog, massively out gunned, hugely in debt, and frankly at their bitter end of the only rope they have. The last thing i want to see is the company implode, but if they do, the i definitely don't want to see nvidia had a single thing that amd has by buying them out or whatever portion of them out. I'd rather see intel snag the AMD GPU/ATI department and watch intel royally own nvidia by developing add-in cards again (though i doubt that'll happen).

    Personally would be badass to see powervr make a mighty return with the help of intel.
     
  5. IvanV

    IvanV HH Assassin Guild Member

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    BTW, regarding AMD stock, I don't think that these guys have any idea what's going on in the industry. They are talking financial trends, but disregarding that AMD is on the brink of releasing a new series of products. I would expect that to give at least a momentary boost to their stock. That-s unless the next series is a huge flop, but the rumours from GDC say that unofficial presentations show 390X to be really fast.

    EDIT: Regarding the situation with the 2900XT, I don-t see that being repeated. The 390X is architecturally similar to the 290X, which is a good product, just with a lot more ALU units. So, unlike the 2900XT, the 390X does not make that many gambles and it will perform.

    Historic note: The 2900XT didn't have the raw performance to compete with the 8800GTX, yet it was a large, "flagship" GPU that was expensive to manufacture. It also had an unnecessarily wide memory bus which increased the price even more (due to a hugely expensive PCB with much more layers than normally required) and it had some weird design decisions such as not having hardware anti aliasing, which was supposed to enable development of custom AA algorithms, but just ended up being inefficient. Later, AMD released the 3870, which was essentially a die-shrunk version of the 2900XT, with a couple of essential patches, mainly a more traditional memory controller that was half the original width and hardware anti aliasing. The end result was sometimes a tad slower and other times a tad faster than the 2900XT, at about half the price, which made for a very successful product (and a good buy because it had enough power for 1920x1080 gaming for the next 3-4 years).

    BTW, the 512 bit memory controllers are not so exotic anymore because 290 cards had them as well, although the type of memory (or controller?!) will be a bit different. Supposedly it will limit the first batches of the cards to 4GB, as the number of VRAM chips that can be used is limited and with their current density 4GB is the limit.
     
    Last edited: Mar 5, 2015
  6. IvanV

    IvanV HH Assassin Guild Member

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    Scratch that. AMD has delayed the 300 series until June. Apparently, they are trying to get rid of the old stock first. Except that people are tired of waiting, buyers are finding their current lineup less and less attractive, AMD is in turn forced to keep lowering their prices, killing the margins in the process, they are leaving the high end to their competitors and when the 300 series does come out it will have lost time and sales and probably the price point and margins it could take if it came out now.

    Sell AMD stock, I'm not feeling well...
     
  7. Neshi

    Neshi HH's cuddly Blue Bear

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    makes you wonder what they are thinking.. there are quite some people waiting for the 300 series to be released to buy a card, yet now they are driven to Nvidia's cards. Waiting so long, until June, also means there will be a less long time when (if) the 300 series really blows Nvidia out of the water before they release their own new cards.
     
  8. Dyre Straits

    Dyre Straits 10 Grandkids -2 Great-grandsons

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    I'm not really biting at the bit to "upgrade" to a new video card. But, with the status of things being as they are, for the very, VERY first time ever, if I were inclined to do so, I'd have to give the green guys some serious consideration. I have owned nothing but ATI/AMD GPUs since the mid-1990s.
     
  9. IvanV

    IvanV HH Assassin Guild Member

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    Most speculate that it's got to do with their partners (card manufacturers) more than anything else. If they start selling the 300 series now, the margins on those products will be higher, but a lot of the 200 series would remain unsold and be complete write-offs. Still, I'm afraid that they'll be selling less and less of them.

    It seems to me that the best idea would be to launch the high end, that the current lineup can't cover, and keep the 200 series to fill the rest of the lineup and then replace it with new parts as it gets sold.
     
  10. Judas

    Judas Obvious Closet Brony Pony

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    Kind of bizarre considering the lack of stock they had on the 2xx due to the mass purchases for running mining rigs.

    so in order to refill stock.. they clearly over purchased and then with bitcoin mining plumetting, those that had the big rigs started selling of thousands of gpus that were in good working order for relatively cheap flooding the market. Honestly there are still TONS of those mining cards out there that are in excellent shape and basically new condition due to their usage. So i really don't see the 2xx cards that are new on the shelf still moving anymore. Specially not with the incoming 3xx.... anyone and their dog knows it's a wise move to hold off.
     

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