Pay Attention to Margins in Intel (INTC) Earnings Call, CNBC's Adami Says
NEW YORK (TheStreet) -- Shares of Intel (INTC) - Get Report are trading lower after hours on Wednesday, due to a mixed 2016 second quarter earnings report, but CNBC contributor Guy Adami suggested investors watch for an opportunity to buy the stock on "Closing Bell" Wednesday.
After today's market close, the chipmaker reported second quarter revenue of $13.5 billion, missing analysts' expectations of $13.54 billion and earnings of 59 cents per share, higher than Wall Street estimates of 53 cents.
"It's not an expensive stock. If it shifts back down to $31 or so, I say you buy it and look for the move back to $37," Adami said.
However, Adami advises that investors also pay attention to the earnings call to see why gross margins came in at 58.9%, missing analysts' prediction of 60.9%.
"Let's see how the dust settles, my first question would be, what's the deal with margins? It's all about margins for me with Intel," Adami commented.
"Obviously" earnings and revenue matter but the "next big thing" is margins and that disappointed, he noted.
Shares of Intel are declining by 1.96% to $34.99 in after-hours trading today.
Separately, TheStreet Ratings rated Intel as a "buy" with a score of B+.
This is driven by some important positives, which can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, reasonable valuation levels and increase in net income. TheStreet Ratings feels its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: INTC
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.