Back to top

Image: Bigstock

Advanced Micro Devices (AMD) Registers a Bigger Fall Than the Market: Important Facts to Note

Read MoreHide Full Article

Advanced Micro Devices (AMD - Free Report) ended the recent trading session at $169.90, demonstrating a -0.31% swing from the preceding day's closing price. The stock's change was less than the S&P 500's daily loss of 0.04%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.03%.

Coming into today, shares of the chipmaker had lost 17.83% in the past month. In that same time, the Computer and Technology sector gained 4.26%, while the S&P 500 gained 2.57%.

Market participants will be closely following the financial results of Advanced Micro Devices in its upcoming release. In that report, analysts expect Advanced Micro Devices to post earnings of $0.60 per share. This would mark no growth from the year-ago period. In the meantime, our current consensus estimate forecasts the revenue to be $5.42 billion, indicating a 1.24% growth compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.46 per share and revenue of $25.32 billion, indicating changes of +30.57% and +11.65%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Advanced Micro Devices. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Advanced Micro Devices is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Advanced Micro Devices is holding a Forward P/E ratio of 49.23. For comparison, its industry has an average Forward P/E of 38.62, which means Advanced Micro Devices is trading at a premium to the group.

It is also worth noting that AMD currently has a PEG ratio of 1.97. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Electronics - Semiconductors stocks are, on average, holding a PEG ratio of 3.26 based on yesterday's closing prices.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Advanced Micro Devices, Inc. (AMD) - free report >>

Published in