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

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Advanced Micro Devices (AMD - Free Report) closed at $101.81 in the latest trading session, marking a +1.47% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.05%.

Coming into today, shares of the chipmaker had lost 8.72% in the past month. In that same time, the Computer and Technology sector lost 9.29%, while the S&P 500 lost 5.07%.

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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.50 per share and revenue of $15.66 billion, which would represent changes of +93.8% and +60.43%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for AMD. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. AMD is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, AMD is holding a Forward P/E ratio of 40.1. This valuation marks a premium compared to its industry's average Forward P/E of 19.41.

Meanwhile, AMD's PEG ratio is currently 0.9. 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. The Electronics - Semiconductors was holding an average PEG ratio of 1.43 at yesterday's closing price.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 112, putting it in the top 45% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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