There are a lot of websites claiming RIM is dead and the BlackBerry is out. This isn’t the case when you look at the future device and OS roadmap and it’s especially not true when you look at the company’s financials. iStockAnalyst did a good breakdown of some key metrics. Highlights include:
- For companies such as RIMM that maintain significant inventories, inventory to sales ratio is a key performance indicator. Inventory to sales for RIMM was 4.41 percent last year, while for this year it is 3.10 percent. Since inventory to sales has decreased from last year by -1.31 percent, RIMM’s inventory management seems to be good.
- RIMM’s sales of $20.6 billion, based on trailing 12 month sales is higher than the sales for the year ended February 2011, which means demand for the company’s products is increasing (I think this is valid even when we consider price inflation). RIMM’s current ratio of 2.04 indicates that the company is managing its operations conservatively.
- The long-term debt for RIMM is $0.0 million, while the net current assets are $4.1 billion, this indicates that the company’s financial position is very sound.
- Currently, the company’s P/E of 4.11 relative to the growth rate of 51.23 percent, based on the average of the three, four and five year historical EPS growth rates, is very attractive.
RIMM stock took a pretty incredible nose dive yesterday after the quarterly conference call. Investors have been really bearish on the stock for a few reasons including:
1) Initial reviews of the PlayBook
2) Worldwide shipments are slowing
3) Lack of ability to create hyped launches
4) Rumored carrier support withdrawal
Continue reading ‘Now Seems Like a Great Time to Buy RIMM Stock’