Advanced Micro Devices Inc (NASDAQ:AMD) saw a decent share price growth in the teens level on the NasdaqCM over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Advanced Micro Devices’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Advanced Micro Devices
Is Advanced Micro Devices still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9% above my intrinsic value, which means if you buy Advanced Micro Devices today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $10.52, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Advanced Micro Devices’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Advanced Micro Devices generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Advanced Micro Devices. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? AMD’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on AMD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Advanced Micro Devices. You can find everything you need to know about Advanced Micro Devices in the latest infographic research report. If you are no longer interested in Advanced Micro Devices, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.