Advanced Micro Devices (AMD) Stock Gains After Samsung Partnership Announcement

NEW YORK (TheStreet) -- Shares of Advanced Micro Devices (AMD) were gaining 3% to $2.71 Thursday after the chipmaker announced a new partnership with Samsung (SSNLF) .

At its Future of Compute event AMD announced that Samsung will release the first ultra high-definition (UHD) monitors that use the chipmaker's FreeSync technology. The technology enables dynamic refresh rates to reduce input latency and visual defects such as screen-tearing when the monitors are synced to the frame rate of AMD Radeon graphics cards.

Samsung will include FreeSync in is UD590 and UE580 monitors in March 2015, and will eventually bring the technology to all of its UHD monitors.

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At the event AMD also announced that Capcom will use the AMD Mantle API in its new Phanta-Rei game engine.

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 expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow."

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

  • 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. 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, 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 ($0.07 versus -$0.11).
  • AMD, with its decline in revenue, underperformed when compared the industry average of 18.6%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The share price of ADVANCED MICRO DEVICES has not done very well: it is down 24.86% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • Net operating cash flow has decreased to $18.00 million or 14.28% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: AMD Ratings Report

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