Tech Roundup: FB, BBRY, AMD, MU, NFLX

NEW YORK (TheStreet) -- In Monday's tech roundup, Facebook (FB) expands to Israel, BlackBerry (BBRY) seeks to calm the public, Advanced Micro Devices (AMD) surges, Micron Technology (MU) gets analysts' thumbs-up, and Netflix (NFLX) prepares to take over the tube.

Facebook agreed to purchase Israel-based mobile analytics firm Onavo to support its Internet.org initiative. The project seeks to expand the Web's reach to unconnected regions, introducing the next 5 billion users to the Internet. Onavo's current Tel-Aviv headquarters will be converted into Facebook's first Israeli office.

Facebook shares closed 0.81% higher to $49.51.

TheStreet Ratings team rates Facebook Inc as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate Facebook Inc (FB) 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FB's very impressive revenue growth greatly exceeded the industry average of 22.7%. Since the same quarter one year prior, revenues leaped by 53.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although FB's debt-to-equity ratio of 0.18 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 10.22, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for Facebook Inc is currently very high, coming in at 87.04%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.36% trails the industry average.
  • Powered by its strong earnings growth of 285.71% and other important driving factors, this stock has surged by 149.74% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • When compared to other companies in the Internet Software & Services industry and the overall market, Facebook Inc's return on equity is below that of both the industry average and the S&P 500.


BlackBerry is set to publish an open letter via 30 media outlets tomorrow to try and calm investor and customer fears over the company's future.

"You can continue to count on BlackBerry," the letter reads, highlighting BlackBerry's cash assets and lack of debt as two reasons contributing to a secure future.

Shares gained 0.87% Monday to close at $8.14.

TheStreet Ratings team rates BlackBerry Ltd as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BlackBerry Ltd (BBRY) a SELL. This is driven by multiple weaknesses, 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BlackBerry Ltd has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, BlackBerry Ltd swung to a loss, reporting -$1.20 a share vs. $2.24 a share in the prior year.
  • 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 Communications Equipment industry. The net income has significantly decreased by 310.6% when compared to the same quarter one year ago, falling from -$235 million to -$965 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Communications Equipment industry and the overall market, BlackBerry Ltd's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$144 million or 133.96% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The revenue fell significantly faster than the industry average of 29.6%. Since the same quarter one year prior, revenues fell by 45%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.


Shares of semiconductor business Advanced Micro Devices surged on Monday after Wedbush Securities upgraded the company to "outperform" from "neutral". Wedbush analyst Betsy Van Hees said AMD's strong position in the gaming console sector would contribute to quarter-on-quarter earnings growth.

Shares were up as much as 4.7% at midday, finally settling to close the day 3.66% higher to $3.97.

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 a few notable weaknesses, 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, weak operating cash flow, generally high debt management risk and feeble growth in its earnings per share."

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 300% when compared to the same quarter one year ago, falling from $37 million to -$74 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' return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$35 million or 143.2% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 5.70 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 1.13, demonstrating the ability to handle short-term liquidity needs.
  • Advanced Micro Devices has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ADVANCED MICRO DEVICES swung to a loss, reporting -$1.59 a share vs. 65 cents a share in the prior year. This year, the market expects an improvement in earnings (-15 cents vs. -$1.59 a share).


Micron Technology welcomed a host of positive analyst ratings on Monday, which pushed shares 1.4% higher to finish at $17.07.

Bernstein Research reaffirmed its "outperform" rating, revising its price target to $24 from $20, while Jefferies & Co. maintained a "buy" rating and updated its price target to $30 from $25.

TheStreet upgraded Micron Technology to a "buy" from "hold", citing revenue growth, solid stock price performance and expanding profit margins as reasons behind the decision.

TheStreet Ratings team rates Micron Technology Inc as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate Micron Technology Inc (MU) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 44.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 729.16% and other important driving factors, this stock has surged by 219.96% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • 45.02% is the gross profit margin for Micron Technology Inc which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 60.07% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 59.33% to $717 million when compared to the same quarter last year. In addition, Micron Technology Inc has also vastly surpassed the industry average cash flow growth rate of -5.08%.


Netflix led the tech sector in Monday trading, soaring 7.8% to close at $324.36, thanks to reports of potential partnerships.

According to The Wall Street Journal, Netflix is currently in negotiations with major U.S. cable providers such as Comcast (CMCSA) and Time Warner (TWC) to integrate its streaming video service into their set-top boxes.

Netflix has also reportedly partnered with Nokia to offer United Kingdom customers free half-yearly and annual subscriptions to the streaming service when they purchase a Lumia handset, The Financial Times reported.

TheStreet Ratings team rates Netflix Inc as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate Netflix Inc (NFLX) 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 revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, premium valuation and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NFLX's revenue growth has slightly outpaced the industry average of 17.8%. Since the same quarter one year prior, revenues rose by 20.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for Netflix Inc is currently very high, coming in at 80.03%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 2.75% is above that of the industry average.
  • Netflix Inc reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, Netflix Inc reported lower earnings of 29 cents a share vs. $4.17 a share in the prior year. This year, the market expects an improvement in earnings ($1.46 vs. 29 cents).
  • 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. When compared to other companies in the Internet & Catalog Retail industry and the overall market, Netflix Inc's return on equity is below that of both the industry average and the S&P 500.

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