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Advanced Micro Devices (AMD) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 mins read

Advanced Micro Devices (AMD) closed the most recent trading day at $84.48, moving -1.94% from the previous trading session. This change lagged the S&P 500's 1.4% loss on the day. At the same time, the Dow lost 1.34%, and the tech-heavy Nasdaq lost 1.57%.

Heading into today, shares of the chipmaker had gained 5.05% over the past month, outpacing the Computer and Technology sector's loss of 0.17% and the S&P 500's loss of 0.46% in that time.

AMD will be looking to display strength as it nears its next earnings release. On that day, AMD is projected to report earnings of $0.36 per share, which would represent year-over-year growth of 100%. Our most recent consensus estimate is calling for quarterly revenue of $2.56 billion, up 42% from the year-ago period.

AMD's full-year Zacks Consensus Estimates are calling for earnings of $1.10 per share and revenue of $8.89 billion. These results would represent year-over-year changes of +71.88% and +32.03%, respectively.

It is also important to note the recent changes to analyst estimates for AMD. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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. The Zacks Consensus EPS estimate remained stagnant within the past month. AMD is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, AMD currently has a Forward P/E ratio of 78.14. This represents a premium compared to its industry's average Forward P/E of 21.39.

Investors should also note that AMD has a PEG ratio of 1.71 right now. 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. Electronics - Semiconductors stocks are, on average, holding a PEG ratio of 1.71 based on yesterday's closing prices.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 121, which puts it in the top 48% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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