NEW YORK (TheStreet) -- Advanced Micro Devices (AMD) was gaining 2.1% to $3.90 Thursday after announcing collaborations with MStar, Novatek, and Realtek to build scaler units with DisplayPort Adaptive-Sync for its Project FreeSync.
MStar, Novatek, and Realtek will develop a range of scalers to support new PC monitors that will come out in the first quarter of 2015. The new monitors will let recent AMD Radeon graphics cards synchronize with the monitors' refresh rates using Project FreeSync.
The new scalers and Project FreeScale are aimed at giving PC gamers "liquid smooth gameplay free of stuttering and tearing" said Matt Skynner, corporate vice president and general manager, Graphics Business Unit, AMD. The new scalers should also help reduce input latency for PC gamers.
TheStreet Ratings team rates ADVANCED MICRO DEVICES as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ADVANCED MICRO DEVICES (AMD) 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 find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.2%. Since the same quarter one year prior, revenues rose by 24.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ADVANCED MICRO DEVICES 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, ADVANCED MICRO DEVICES continued to lose money by earning -$0.11 versus -$1.59 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus -$0.11).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, ADVANCED MICRO DEVICES has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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 debt-to-equity ratio is very high at 4.41 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 1.21, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: AMD Ratings Report