ATI stock at rock bottom
- Thread starter rwolf
- Start date
No.Mendel said:
Your information seems incorrect.
Q4 (their next quarter), ended August 31th, might very well be extremely problematic for them, and there are plenty of reasons for it; these results will be given in early October. As far as I know, royalties will only start rolling in Q1, and same goes for the Rx5xx lineup revenues afaik.
ATI will be fine, but it seems like an extremely bad idea to buy ATI stock before they're a fair bit lower. The problem is simple: if their Q4 results are as bad as I expect them to be, they'll have to compare them to last year's Q4, which was an extremely good one. And the "full year" results would be given simultaneously.
That doesn't mean their stock will drop substancially then, though, because their forecast for Q1 could be good. On the other hand, they've lost a fair bit of shareholder credibility because of the Q3 debacle, so if their Q4 results aren't as good as (or rather, are worse than) expected, I'm not sure how much of that will be taken at face value by analysts.
Simply put, I would be greatly surprised if ATI didn't go lower still, perhaps even below $10. Long-term, they're a good investment imo, but this doesn't seem like the best time to buy - yet. All IMO, and I take no responsability for any of these statements.
Uttar
Q4 (their next quarter), ended August 31th, might very well be extremely problematic for them, and there are plenty of reasons for it; these results will be given in early October. As far as I know, royalties will only start rolling in Q1, and same goes for the Rx5xx lineup revenues afaik.
ATI will be fine, but it seems like an extremely bad idea to buy ATI stock before they're a fair bit lower. The problem is simple: if their Q4 results are as bad as I expect them to be, they'll have to compare them to last year's Q4, which was an extremely good one. And the "full year" results would be given simultaneously.
That doesn't mean their stock will drop substancially then, though, because their forecast for Q1 could be good. On the other hand, they've lost a fair bit of shareholder credibility because of the Q3 debacle, so if their Q4 results aren't as good as (or rather, are worse than) expected, I'm not sure how much of that will be taken at face value by analysts.
Simply put, I would be greatly surprised if ATI didn't go lower still, perhaps even below $10. Long-term, they're a good investment imo, but this doesn't seem like the best time to buy - yet. All IMO, and I take no responsability for any of these statements.
Uttar
Hey Uttar, could you give me a PM when you think it IS a good time to buy ATi? I won't tell anyone nor hold you responsible, it's just I've been meaning to pick up some of their stock too since it's low and I think it's gonna go back up....but I'd rather wait until it bottoms out.Uttar said:
Hellbinder
Banned
Mendel said:
No, thats just not the way it works.
A tech stock can slide up and down based on predictions and such but it is driven by actual delivered goods and services and all the buzz that goes with that.
If they deliver a solid top to bottom line up with leading performance at the Top and the 200$ level then ATi's stock will climb back up rapidly. The release of the Xbox360 will also boost it as developers like Carmack etc choose it as their primary dev platform. Specifically becuase the industry knows that the R6XX series will follow suit giving ATi an advantage.
70% delivered goods 30% speculation.
Honestly, I doubt it's gonna "bottom out" in the next few weeks; so if you want to do a short-term transaction, my suggestion is to just put an order at around $11.25 with a, let's say, 40-45 days limit. If the stockmarket is good in the upcoming weeks, that would be a small win I guess.digitalwanderer said:Hey Uttar, could you give me a PM when you think it IS a good time to buy ATi? I won't tell anyone nor hold you responsible, it's just I've been meaning to pick up some of their stock too since it's low and I think it's gonna go back up....but I'd rather wait until it bottoms out.
The real value, if I'm right, would be after they announced their Q4 results though. Analysts are expecting $0.07/share profits; considering ATI's position is worse than the one they had last quarter and they only had a $0.03/share profit back then, the odds of reaching that target are rather low imo.
A problem with that, however, is that if their profits (losses?) don't reach that estimate - at all - they'll have to issue a profit warning. You can't reliably guess when they'd do that, if they do so, which makes a short-term investment quite risky imo. Of course, you might argue that their Q4 results might be exceptional, but let's be realistic here: even if R5xx shipments to OEMs/AIBs began in the end of Q3, that wouldn't offset much more than the costs of the tapeouts and respins.
From my point of view, ATI's only way out of a quite damn bad quarter is to get partners to already pay for the next-gen chips, and maybe get a little bit out of MS, but I'm not aware of the exact licensing agreement terms there (is the money given when the produced chips are put in an actual box? when it's shipped? or just when it's produced? etc. - I'd bet on the shipping one).
But as I said above, they'd need to do that very aggressively to offset even just the respin/tapeout/etc. costs. And forcing or "actively encouraging" partners to do purchases earlier than expected to meet financial estimates is an illegal activity, for which NVIDIA for example was caught a few years ago. ATI still is in the final closing stages of an investigations by the canadian equivalent of the SEC, so...
Now, if all the R5xx revenue came in Q1, as well as the XBox360 licensing revenue, then it could be an excellent quarter. But once again, that's Q1 - not Q4. I could be wrong when it comes to XBox360 shipments, but I would tend to believe the biggest chunk of that revenue will come in Q1. I'd have to check on this.
And Hellbinder, I'm sure pension/hedge/speculative funds and banks care a lot about "buzz". I'm not saying it doesn't have an impact, but you're overestimating it. The actual "climbing up" happens when you deliver revenues from your new product line.
Announcements are only going to matter if financial analysts are *very* closely watching the sector and giving buy/sell advice based on a good understanding of the market. I've yet to see any really amazing analysis from these guys in the GPU industry, personally, but I'd love to be proved wrong.
Uttar
Hellbinder
Banned
Um.. I think that is basically what i just said. Or am i totally crazy. 70% Product 30% speculation??
Looks like they hit another local rock bottom. Not a bad point to jump back in and buy some stock.
epic
epic
Mintmaster
Veteran
The worst is not over yet for ATI. NVidia is going to put a lot of pricing pressure on ATI.
The decisions made for R5xx were not very smart for the well-being of ATI as a business.
The decisions made for R5xx were not very smart for the well-being of ATI as a business.
I dont tend to go all in. Maybe 20% now and the bulk in the coming weeks. However, its not a bad place to get in.Mintmaster said:
epic
The short answer is, buy NVIDIA stock. ATI's growth in handset, chipsets and consoles won't offset their share losses in their core business within the next 6 months. Short-term, ATI might do pretty ok. Mid-term, it's suicide. NVIDIA, even though it went up bigtime, still has a good +20-30% ahead of itself.Tahir2 said:
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