Long term investing can be life changing when you buy and hold the truly great businesses. And highest quality companies can see their share prices grow by huge amounts. Don't believe it? Then look at the Advanced Micro Devices, Inc. (NASDAQ:AMD) share price. It's 1708% higher than it was five years ago. If that doesn't get you thinking about long term investing, we don't know what will. It's also good to see the share price up 39% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
We love happy stories like this one. The company should be really proud of that performance!
Given that Advanced Micro Devices only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
For the last half decade, Advanced Micro Devices can boast revenue growth at a rate of 8.8% per year. That's a pretty good long term growth rate. However, the share price gain of 78% during the period is considerably stronger. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Advanced Micro Devices is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.
A Different Perspective
It's good to see that Advanced Micro Devices has rewarded shareholders with a total shareholder return of 134% in the last twelve months. That gain is better than the annual TSR over five years, which is 78%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Advanced Micro Devices better, we need to consider many other factors. For instance, we've identified 3 warning signs for Advanced Micro Devices that you should be aware of.
But note: Advanced Micro Devices may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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