X-bit Labs reports financial analysts are disappointed with AMD's management mis-execution. Some Wall Street analysts are now rating AMD as an "un-investable" company, wheras others believe that the chip maker will be unable to design and sell good CPUs and GPUs without sufficient amount of employees.
“We have no further confidence that any aspect of our prior structural thesis (margin accretion, cash flow, and balance sheet deleveraging) will play out in the foreseeable future. Indeed, we now see the prospect for structurally lower margins, as well as cash burn [...]. Frankly, the most common adjective that comes up when we discuss the company with clients is, simply, ‘un-investable’. We are now believers,” said Stacy Rasgon, an analyst with Bernstein Research, reports Tech Trader Daily.
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“We now have less confidence in go-forward cash burn given rapidly declining ASPs and management’s new refusal to provide gross margin guidance. Thus, we worry about the magnitude of intended pricing cuts and gross margin impacts as AMD’s cash bleed could intensify. […] Further, management’s ongoing misexecution in our opinion seems to be contributing too (building too much inventory, firing top operational managers, channel misalignment, withdrawing from broad swaths of the market). Finally, the firm announced 15% head-count reductions, which will make it more difficult to engineer and sell competitive products,” wrote Craig Berger, an analyst with FBR Capital, in a note to clients.
