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

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Zacks Equity Research
·3 min read
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In the latest trading session, Advanced Micro Devices (AMD) closed at $78.52, marking a +0.99% move from the previous day. This move lagged the S&P 500's daily gain of 1.95%. Meanwhile, the Dow gained 1.85%, and the Nasdaq, a tech-heavy index, added 1.55%.

Heading into today, shares of the chipmaker had lost 11.49% over the past month, lagging the Computer and Technology sector's loss of 6.69% and the S&P 500's loss of 2.45% in that time.

AMD will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.44, up 144.44% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.21 billion, up 79.48% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.93 per share and revenue of $13.47 billion. These totals would mark changes of +49.61% and +37.94%, respectively, from last year.

Investors might also notice 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 currently has a Zacks Rank of #3 (Hold).

Digging into valuation, AMD currently has a Forward P/E ratio of 40.28. This represents a premium compared to its industry's average Forward P/E of 19.96.

Investors should also note that AMD has a PEG ratio of 1.27 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 1.69 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 71, which puts it in the top 28% 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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