NEW YORK (TheStreet) - Amazon (AMZN) has refreshed its contender in the tablet wars, adding two new models to its lineup and updating and discounting previous models. With the new release, Amazon hopes to unseat Apple's (AAPL) dominance in the tablet market.
"It's been just two years since we introduced the first Kindle Fire, and the team is innovating at an unbelievable speed," said CEO Jeff Bezos in a company press release.
Amazon shares are down 0.23% to $313.40 as of 3:18 p.m. EST. The stock has ranged in price from $310.75 to $316.71 after opening the day at $314.53. Overall, Amazon is lagging the S&P 500, which is down 0.07%.
Available from mid-October, the Kindle Fire HDX, Amazon's third-generation tablet, is 34% lighter, has twice the memory, three times the processing power and a higher pixel density than its predecessor.
Also, in a move which deviates from streaming competitor Netflix (NFLX), Amazon announced it will add offline viewing functionality to its Prime Instant Video service.
TheStreet Ratings team rates Amazon as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate Amazon 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, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Amazon's revenue growth has slightly outpaced the industry average of 17.8%. Since the same quarter one year prior, revenues rose by 22.4%. 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.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- 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 Internet & Catalog Retail industry. The net income has significantly decreased by 200% when compared to the same quarter one year ago, falling from $7 million to -$7 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, Amazon'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: AMZN Ratings Report
Written by Keris Alison Lahiff.