NEW YORK (TheStreet) -- Shares of semiconductor company Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report closed down 8.46% to $3.03 on Friday, as the stock corrected following its double-digit gains on Thursday.
The stock soared Thursday after an AMD representative said on the company's official Facebook page that its upcoming Radeon R9 300 series graphics cards are in their final stages of development.
"We're still putting the finishing touches on the 300 series to make sure they live up to expectation," the company wrote. "Can't wait to reveal them though. We're pretty excited."
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The representative also wrote that there is no official release date yet, but added the company would "definitely" announce it on Facebook when the time comes.
More than 38.1 million shares changed hands Friday, compared to the daily average volume of 17,345,700.
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."
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.
- You can view the full analysis from the report here: AMD Ratings Report