Jim Cramer on Amazon (AMZN) Earnings, Johnson Controls (JCI), Eaton (ETN) and Under Armour (UA)

NEW YORK (TheStreet) -- Amazon  (AMZN) reports earnings next week, and TheStreet's Jim Cramer notes that the company's most recent quarter was not great because it showed a downward tick in revenue.

These upcoming earnings, though, depend on what kind of peak Amazon gives. Cramer notes Amazon needs to tell investors something to indicate the last quarter was an aberration or the stock will not rally. "If they don't, then it's dead money," he says.

One Twitter user asked Cramer if Johnson Controls  (JCI) is a better investment than Eaton  (ETN) at their current prices, and Cramer thinks Eaton has not fallen as much as Johnson, therefore the latter is probably the better value.

Finally, Cramer says Under Armour  (UA) truly became a momentum stock and has given up a lot of its momentum, but he thinks it can go higher. Cramer encourages a longer-term view because the company is moving aggressively into China and other international markets. He recommends buying half ahead of the quarter and half after.

Must Watch: Jim Cramer Answers Twitter Questions on Amazon, Eaton, Under Armour

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates AMAZON.COM INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: 

"We rate AMAZON.COM INC (AMZN) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."

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

  • The revenue growth came in higher than the industry average of 8.8%. 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.
  • AMAZON.COM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, AMAZON.COM INC turned its bottom line around by earning $0.58 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($1.97 versus $0.58).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • The gross profit margin for AMAZON.COM INC is currently lower than what is desirable, coming in at 30.26%. Regardless of AMZN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.93% trails the industry average.
  • AMZN's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that AMZN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.67 is low and demonstrates weak liquidity.
  • You can view the full analysis from the report here: AMZN Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates JOHNSON CONTROLS INC as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate JOHNSON CONTROLS INC (JCI) a BUY. This is driven by a few notable strengths, 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, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

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

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.5%. Since the same quarter one year prior, revenues slightly increased by 4.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that JCI's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • Powered by its strong earnings growth of 32.69% and other important driving factors, this stock has surged by 36.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • JOHNSON CONTROLS INC has improved earnings per share by 32.7% 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, JOHNSON CONTROLS INC reported lower earnings of $1.71 versus $1.79 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $1.71).
  • The net income growth from the same quarter one year ago has exceeded that of the Auto Components industry average, but is less than that of the S&P 500. The net income increased by 30.6% when compared to the same quarter one year prior, rising from $359.00 million to $469.00 million.
  • You can view the full analysis from the report here: JCI Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates EATON CORP PLC as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate EATON CORP PLC (ETN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, solid stock price performance, growth in earnings per share and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

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

  • The revenue growth came in higher than the industry average of 4.8%. Since the same quarter one year prior, revenues rose by 27.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.09, which illustrates the ability to avoid short-term cash problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • EATON CORP PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EATON CORP PLC increased its bottom line by earning $3.90 versus $3.51 in the prior year. This year, the market expects an improvement in earnings ($4.80 versus $3.90).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 167.6% when compared to the same quarter one year prior, rising from $179.00 million to $479.00 million.
  • You can view the full analysis from the report here: ETN Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Separately, TheStreet Ratings team rates UNDER ARMOUR INC as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNDER ARMOUR INC (UA) a BUY. This is driven by a number of strengths, 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

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

  • The revenue growth came in higher than the industry average of 15.0%. Since the same quarter one year prior, revenues rose by 35.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • UA's debt-to-equity ratio is very low at 0.15 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
  • UNDER ARMOUR INC has improved earnings per share by 25.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNDER ARMOUR INC increased its bottom line by earning $1.50 versus $1.21 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.50).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Textiles, Apparel & Luxury Goods industry average, but is less than that of the S&P 500. The net income increased by 28.0% when compared to the same quarter one year prior, rising from $50.13 million to $64.17 million.
  • Net operating cash flow has increased to $232.41 million or 12.94% when compared to the same quarter last year. In addition, UNDER ARMOUR INC has also modestly surpassed the industry average cash flow growth rate of 9.59%.
  • You can view the full analysis from the report here: UA Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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