Why Research In Motion Could Head Lower

Shares of Research In Motion (Nasdaq: RIMM  ) hit a 52-week low on Friday. Let's look at how it got here and see whether dark clouds are ahead.

How it got here
Here we are again. Just a month ago, RIM hit a 52-week low, but the company got clobbered on Friday in the wake of a dismal earnings report and continued skepticism over its future prospects, which look bleaker and bleaker every quarter. Shares have now retraced back to levels not seen since 2003, trading near $7 for the first time in nearly a decade.

First-quarter revenue plunged 43% to $2.8 billion, generating a GAAP net loss of $518 million, or $0.99 per share. On an adjusted basis, excluding goodwill impairment, that was "just" a net loss of $192 million, or $0.37 per share. Both figures look pretty grim compared to the $695 million profit posted a year ago on $4.9 billion in sales.

The company shipped 7.8 million smartphones and 260,000 PlayBook tablets, poor showings relative to the 13.2 million BlackBerrys and 500,000 PlayBooks moved last time around. Worse yet, the platform that the company is literally betting its entire future on, BlackBerry 10, continues to be pushed even further into the future.

Investors are rightfully losing their patience with the beleaguered Canadian smartphone maker.

How it stacks up
Let's see how RIM stacks up with its mobile rivals and peers.

RIMM Chart

RIMM data by YCharts

We'll include some fundamental metrics for more insight.

Company

P/S (TTM)

Sales Growth (TTM)

Net Margin (TTM)

ROE (TTM)

Research In Motion 0.30 (20.6%) (0.30%) (0.5%)
Apple (Nasdaq: AAPL  ) 3.7 62.8% 27.1% 47.1%
Nokia (NYSE: NOK  ) 0.2 (17.8%) (9.2%) (19.4%)
Google (Nasdaq: GOOG  ) 4.6 28.5% 27.1% 19.6%
Microsoft (Nasdaq: MSFT  ) 3.4 6.4% 32% 38.2%

Source: Reuters. TTM = trailing 12 months.

RIM and Nokia don't look so hot, with falling sales and profitability, largely at the hands of the iPhone. Google continues to dominate the smartphone landscape with Android, while Microsoft hopes to grow its measly 2% market share with the next major version of Windows Phone.

What's next?
Almost nothing is going right for RIM right about now. Existing hardware sales are tumbling, and even the BlackBerry loyalists who are eagerly anticipating BlackBerry 10 are probably losing patience as the platform continues to see multiple delays. The clock is ticking on this turnaround, and freshly minted CEO Thorsten Heins has his work cut out for him. RIM has much more pain in store.

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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Microsoft, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Apple and creating bull call spread positions in Apple and Microsoft. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.
 


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