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Advanced Micro Devices (AMD) Ascends But Remains Behind Market: Some Facts to Note

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The latest trading session saw Advanced Micro Devices (AMD - Free Report) ending at $160.24, denoting a +0.81% adjustment from its last day's close. This change lagged the S&P 500's 0.85% gain on the day. Meanwhile, the Dow experienced a drop of 0.09%, and the technology-dominated Nasdaq saw an increase of 1.53%.

Shares of the chipmaker witnessed a gain of 3.79% over the previous month, beating the performance of the Computer and Technology sector with its loss of 3.6% and the S&P 500's gain of 3.11%.

The investment community will be paying close attention to the earnings performance of Advanced Micro Devices in its upcoming release. On that day, Advanced Micro Devices is projected to report earnings of $0.67 per share, which would represent year-over-year growth of 15.52%. Alongside, our most recent consensus estimate is anticipating revenue of $5.71 billion, indicating a 6.58% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.41 per share and revenue of $25.29 billion. These totals would mark changes of +28.68% and +11.51%, respectively, from last 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. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.22% lower. As of now, Advanced Micro Devices holds a Zacks Rank of #3 (Hold).

In terms of valuation, Advanced Micro Devices is currently trading at a Forward P/E ratio of 46.6. This denotes a premium relative to the industry's average Forward P/E of 40.04.

We can additionally observe that AMD currently boasts a PEG ratio of 1.4. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Electronics - Semiconductors was holding an average PEG ratio of 2.9 at yesterday's closing price.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 164, putting it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AMD in the coming trading sessions, be sure to utilize Zacks.com.


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