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Advanced Micro Devices (AMD) Stock Sinks As Market Gains: What You Should Know

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Advanced Micro Devices (AMD - Free Report) closed at $95.36 in the latest trading session, marking a -1.95% move from the prior day. This move lagged the S&P 500's daily gain of 0.04%. Elsewhere, the Dow gained 0.19%, while the tech-heavy Nasdaq added 0.28%.

Coming into today, shares of the chipmaker had gained 2.61% in the past month. In that same time, the Computer and Technology sector gained 4.2%, while the S&P 500 gained 3.84%.

Investors will be hoping for strength from AMD as it approaches its next earnings release. The company is expected to report EPS of $0.47, up 46.88% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.01 billion, up 41.69% from the year-ago period.

It is also important to note the recent changes to analyst estimates for AMD. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.88% higher. AMD is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, AMD is currently trading at a Forward P/E ratio of 54.52. For comparison, its industry has an average Forward P/E of 23.28, which means AMD is trading at a premium to the group.

It is also worth noting that AMD currently has a PEG ratio of 1.1. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMD's industry had an average PEG ratio of 1.53 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 116, putting it in the top 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AMD in the coming trading sessions, be sure to utilize Zacks.com.


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