Why Amazon.com (AMZN) Stock Is Down Today

NEW YORK (TheStreet) -- Amazon.com (AMZN) was falling -1.4% to $341.70 Monday after cutting the price of the Fire Phone to 99 cents on a two-year contract.

The smartphone was first introduced for $99.99 on a two-year contract with AT&T (T) . The Amazon Fire Phone still comes with a year of Amazon Prime at the lower price.

The price cut for the smartphone comes after reports that the online retailer sold fewer than 35,000 units in the first 25 days, according to MarketWatch.

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Earlier in the day Amazon announcing it will bring the Fire Phone to Germany and the U.K. on Sept. 30. The phone will be available on Deutsche Telekom (DTEGY) in Germany and Telefonica's (TEF) O2 network in the U.K.

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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share."

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

  • The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 23.1%. 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.
  • Although AMZN's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
  • 36.46% is the gross profit margin for AMAZON.COM INC which we consider to be strong. 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 -0.65% trails the industry average.
  • 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 1700.0% when compared to the same quarter one year ago, falling from -$7.00 million to -$126.00 million.
  • Net operating cash flow has declined marginally to $862.00 million or 2.04% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AMAZON.COM INC has marginally lower results.
  • You can view the full analysis from the report here: AMZN Ratings Report

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