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

Zacks Equity Research

Advanced Micro Devices (AMD) closed the most recent trading day at $30.72, moving +0.62% from the previous trading session. This change lagged the S&P 500's 1% gain on the day.

Prior to today's trading, shares of the chipmaker had lost 0.97% over the past month. This has lagged the Computer and Technology sector's loss of 0.45% and was narrower than the S&P 500's loss of 1.22% in that time.

Investors will be hoping for strength from AMD as it approaches its next earnings release. On that day, AMD is projected to report earnings of $0.18 per share, which would represent year-over-year growth of 38.46%. Our most recent consensus estimate is calling for quarterly revenue of $1.80 billion, up 9.08% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.63 per share and revenue of $6.76 billion, which would represent changes of +36.96% and +4.43%, respectively, from the prior year.

Any recent changes to analyst estimates for AMD should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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

Investors should also note AMD's current valuation metrics, including its Forward P/E ratio of 48.59. For comparison, its industry has an average Forward P/E of 19.8, which means AMD is trading at a premium to the group.

Meanwhile, AMD's PEG ratio is currently 2.06. 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 industry currently had an average PEG ratio of 2.06 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 96, putting it in the top 38% 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.

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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