Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Advanced Micro Devices (AMD - Free Report) closed at $102.82, marking a +1.25% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.08%.

Prior to today's trading, shares of the chipmaker had lost 6.64% over the past month. This has lagged the Computer and Technology sector's loss of 0.11% and the S&P 500's loss of 1.81% in that time.

Investors will be hoping for strength from AMD as it approaches its next earnings release. The company is expected to report EPS of $0.66, up 60.98% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.12 billion, up 47.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.50 per share and revenue of $15.66 billion. These totals would mark changes of +93.8% and +60.43%, respectively, from last year.

Investors should also note any 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. AMD currently has a Zacks Rank of #2 (Buy).

Digging into valuation, AMD currently has a Forward P/E ratio of 40.58. This represents a premium compared to its industry's average Forward P/E of 19.27.

It is also worth noting that AMD currently has a PEG ratio of 0.91. 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. The Electronics - Semiconductors industry currently had an average PEG ratio of 1.55 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 117, putting it in the top 47% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


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


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

Published in