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Advanced Micro Devices (AMD) Gains But Lags Market: What You Should Know

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Advanced Micro Devices (AMD - Free Report) closed at $21.34 in the latest trading session, marking a +1.38% move from the prior day. The stock lagged the S&P 500's daily gain of 2.3%. Meanwhile, the Dow gained 2.5%, and the Nasdaq, a tech-heavy index, added 2.95%.

Prior to today's trading, shares of the chipmaker had gained 22.38% over the past month. This has outpaced the Computer and Technology sector's loss of 1.65% and the S&P 500's gain of 1.21% in that time.

Wall Street will be looking for positivity from AMD as it approaches its next earnings report date. This is expected to be January 29, 2019. The company is expected to report EPS of $0.09, up 12.5% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.45 billion, down 1.78% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.46 per share and revenue of $6.54 billion, which would represent changes of +170.59% and +22.65%, 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. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. AMD is currently a Zacks Rank #3 (Hold).

Investors should also note AMD's current valuation metrics, including its Forward P/E ratio of 45.6. Its industry sports an average Forward P/E of 16.95, so we one might conclude that AMD is trading at a premium comparatively.

It is also worth noting that AMD currently has a PEG ratio of 3.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Electronics - Semiconductors was holding an average PEG ratio of 1.41 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 87, putting it in the top 34% 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.

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




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