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

·3 min read

Advanced Micro Devices (AMD) closed the most recent trading day at $84.64, moving -0.95% from the previous trading session. This change lagged the S&P 500's 1.06% gain on the day. Elsewhere, the Dow gained 0.71%, while the tech-heavy Nasdaq added 0.09%.

Prior to today's trading, shares of the chipmaker had lost 15.25% over the past month. This has lagged the Computer and Technology sector's loss of 4.33% and the S&P 500's loss of 1.14% in that time.

Wall Street will be looking for positivity from Advanced Micro Devices as it approaches its next earnings report date. In that report, analysts expect Advanced Micro Devices to post earnings of $1.06 per share. This would mark year-over-year growth of 45.21%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.71 billion, up 55.51% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.37 per share and revenue of $26.23 billion, which would represent changes of +56.63% and +59.59%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Advanced Micro Devices. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Within the past 30 days, our consensus EPS projection has moved 0.4% lower. Advanced Micro Devices is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Advanced Micro Devices's current valuation metrics, including its Forward P/E ratio of 19.56. This represents a premium compared to its industry's average Forward P/E of 14.76.

It is also worth noting that AMD currently has a PEG ratio of 0.7. 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 1 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 94, which puts 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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