Amazon (AMZN) May Develop Set-Top Box

Tickers in this article: AAPL AMZN

NEW YORK ( TheStreet) -- The world's largest Internet retailer Amazon  is reportedly preparing to launch a set-top streaming box, according to The Wall Street Journal . Rumors of its development have been circulating since April.

The device would allow for internet-enabled video streaming through users' television sets, taking advantage of Amazon services such as Video on Demand and Amazon Prime. Amazon would be competing against devices with similar functionality, such as Apple's ( ) Apple TV and Roku.

Amazon has recently filed for a trademark on the name "Firetube" for an unidentified project in the U.S. and Canada, reports CNet. The branding would be consistent with Amazon's tablet line, the Kindle Fire.

Amazon's hardware diversification has been a hot topic of late, with two smartphones rumored to be in development . The project is still in development and no release timeframe has been confirmed.

An Amazon spokesperson was not able to be reached by the time of publishing.

Shares of Amazon.com Inc  (AMZN) stock are up today by $3.64 (1.16%) as of 3:53 p.m. ET. Thus far, 1.43 million shares of Amazon.com Inc changed hands as compared to its average daily volume of 2.42 million shares. The stock has ranged in price between $312.62 to $319 after opening the day at $315.13 as compared to the previous trading day's close of $314.76. Overall, Amazon.com Inc is leading the S&P 500 which is up 0.63%. 

TheStreet Ratings team rates Amazon.com Inc as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate Amazon.com Inc (AMZN) 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, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

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

  • AMZN's revenue growth has slightly outpaced the industry average of 17.8%. Since the same quarter one year prior, revenues rose by 22.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 200.0% when compared to the same quarter one year ago, falling from $7 million to -$7 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, Amazon.com Inc's return on equity significantly trails that of both the industry average and the S&P 500.

Written by Keris Alison Lahiff.