We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights: Intel, Hewlett Packard, Cisco, Advanced Micro and NVIDIA
Read MoreHide Full Article
For Immediate Release
Chicago, IL –August 3, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Intel (INTC - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) , Cisco (CSCO - Free Report) , Advanced Micro Devices (AMD - Free Report) and NVIDIA (NVDA - Free Report)
Here are highlights from Thursday’s Analyst Blog:
Is AMD Really a Safer Bet than Intel?
Intel’s quarter was unexciting-
The company reported a modest earnings beat of a little over 5% on revenues that beat by a mere 0.3%. Revenues were up 15% and per share earnings up 82% driven mainly by the lower tax rate and not execution.
Segment wise revenue growth wasn’t something to complain about, with the PC-centric business growing 6% and the data centric portion growing 26% (driven by the 27% growth in the data center segment).
The concern very clearly isn’t about the growth rates Intel generated, but rather the much higher growth rates of its data center competitors Advanced Micro Devices and NVIDIA because it seems to indicate share loss (speculation helped by comment from prior CEO Krzanich that the company could lose 15-20% share to AMD). Intel struggling with its 10nm process while AMD samples its 7nm chips is another concern. And to top it all, it doesn’t have a permanent CEO to head things at this crucial juncture.
Intel’s post-results consensus earnings estimates for 2018 and 2019 are moving up. Its 2018 sales estimate remains unchanged with the 2019 estimate going up 1.9%.
AMD, on the other hand-
The company’s earnings beat of 20% came on revenues that beat by 2.2%, both off a much smaller base than Intel. But revenue growth of 53% and earnings growth of 15 cents from a 1 cent loss in the year-ago quarter were encouraging. This is the highest quarterly net income it has reported in 7 years, demonstrating that the turnaround is progressing well.
Its Computing and Graphics segment revenue jumped 64% driven by Radeon and Ryzen products while the Enterprise, Embedded and Semi-Custom segment also did quite well, growing 37% on the back of higher semi-custom and server revenue. This is the area of concern because its one-year-old EPYC chip for the data center appears to be doing very well, with AMD calling out wins at big players like Hewlett Packard Enterprise, Cisco, Tencent and The National Institute for Nuclear Physics in Italy.
AMD’s post-results consensus earnings estimate for 2018 and 2019 are up slightly. Its 2018 sales estimate remains unchanged with the 2019 estimate going up 1.1%.
So basically, Intel is the leader in the data center market with multiple issues affecting its ability to protect market share while AMD is the challenger with all the elements that can help it pick up that share provided there’s no slip in execution. The market itself is growing rapidly, which benefits all players.
On the basis of price/forward 12 months earnings, INTC stock has been consistently undervalued with respect to the S&P 500 over the past year while AMD stock has been overvalued. The median P/E for INTC is 13.56X compared with AMD’s 44.22X and the S&P 500’s 17.96X.
On the basis of price/forward 12 months earnings growth (PEG), INTC stock has again been consistently undervalued with respect to the S&P 500 over the past year while AMD stock has been overvalued. The median PEG for INTC is 1.61X compared with AMD’s 5.71X and the S&P 500’s 1.82X.
Similar is the picture on the basis of price to book value. The median P/B for INTC is 3.10X compared with AMD’s 19.54X and the S&P 500’s 3.78X.
Conclusion
The above discussion shows that AMD is coming out of a long spell of underperformance and CEO Lisa Su deserves to be congratulated for the ongoing reversal in its fortunes.
At the same time, Intel is one of those giants that continues to turn in some pretty strong numbers even in the face of growing competition and the squandering of its process lead. The depth and breadth of its data center offerings makes it difficult to unseat. Its IoT, especially self-driving car opportunity is also nothing to scoff at and the PC business is surprisingly strong all things considered.
The second half should be much stronger for both companies. But today, considering all of the above and Intel’s valuation, the stock definitely seems to be the winner.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights: Intel, Hewlett Packard, Cisco, Advanced Micro and NVIDIA
For Immediate Release
Chicago, IL –August 3, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Intel (INTC - Free Report) , Hewlett Packard Enterprise (HPE - Free Report) , Cisco (CSCO - Free Report) , Advanced Micro Devices (AMD - Free Report) and NVIDIA (NVDA - Free Report)
Here are highlights from Thursday’s Analyst Blog:
Is AMD Really a Safer Bet than Intel?
Intel’s quarter was unexciting-
The company reported a modest earnings beat of a little over 5% on revenues that beat by a mere 0.3%. Revenues were up 15% and per share earnings up 82% driven mainly by the lower tax rate and not execution.
Segment wise revenue growth wasn’t something to complain about, with the PC-centric business growing 6% and the data centric portion growing 26% (driven by the 27% growth in the data center segment).
The concern very clearly isn’t about the growth rates Intel generated, but rather the much higher growth rates of its data center competitors Advanced Micro Devices and NVIDIA because it seems to indicate share loss (speculation helped by comment from prior CEO Krzanich that the company could lose 15-20% share to AMD). Intel struggling with its 10nm process while AMD samples its 7nm chips is another concern. And to top it all, it doesn’t have a permanent CEO to head things at this crucial juncture.
Intel’s post-results consensus earnings estimates for 2018 and 2019 are moving up. Its 2018 sales estimate remains unchanged with the 2019 estimate going up 1.9%.
AMD, on the other hand-
The company’s earnings beat of 20% came on revenues that beat by 2.2%, both off a much smaller base than Intel. But revenue growth of 53% and earnings growth of 15 cents from a 1 cent loss in the year-ago quarter were encouraging. This is the highest quarterly net income it has reported in 7 years, demonstrating that the turnaround is progressing well.
Its Computing and Graphics segment revenue jumped 64% driven by Radeon and Ryzen products while the Enterprise, Embedded and Semi-Custom segment also did quite well, growing 37% on the back of higher semi-custom and server revenue. This is the area of concern because its one-year-old EPYC chip for the data center appears to be doing very well, with AMD calling out wins at big players like Hewlett Packard Enterprise, Cisco, Tencent and The National Institute for Nuclear Physics in Italy.
AMD’s post-results consensus earnings estimate for 2018 and 2019 are up slightly. Its 2018 sales estimate remains unchanged with the 2019 estimate going up 1.1%.
So basically, Intel is the leader in the data center market with multiple issues affecting its ability to protect market share while AMD is the challenger with all the elements that can help it pick up that share provided there’s no slip in execution. The market itself is growing rapidly, which benefits all players.
On the basis of price/forward 12 months earnings, INTC stock has been consistently undervalued with respect to the S&P 500 over the past year while AMD stock has been overvalued. The median P/E for INTC is 13.56X compared with AMD’s 44.22X and the S&P 500’s 17.96X.
On the basis of price/forward 12 months earnings growth (PEG), INTC stock has again been consistently undervalued with respect to the S&P 500 over the past year while AMD stock has been overvalued. The median PEG for INTC is 1.61X compared with AMD’s 5.71X and the S&P 500’s 1.82X.
Similar is the picture on the basis of price to book value. The median P/B for INTC is 3.10X compared with AMD’s 19.54X and the S&P 500’s 3.78X.
Conclusion
The above discussion shows that AMD is coming out of a long spell of underperformance and CEO Lisa Su deserves to be congratulated for the ongoing reversal in its fortunes.
At the same time, Intel is one of those giants that continues to turn in some pretty strong numbers even in the face of growing competition and the squandering of its process lead. The depth and breadth of its data center offerings makes it difficult to unseat. Its IoT, especially self-driving car opportunity is also nothing to scoff at and the PC business is surprisingly strong all things considered.
The second half should be much stronger for both companies. But today, considering all of the above and Intel’s valuation, the stock definitely seems to be the winner.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.