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

·3-min read

In the latest trading session, Advanced Micro Devices (AMD) closed at $75.35, marking a +0.2% move from the previous day. This move lagged the S&P 500's daily gain of 0.36%. Elsewhere, the Dow gained 0.23%, while the tech-heavy Nasdaq lost 0.1%.

Coming into today, shares of the chipmaker had lost 28.57% in the past month. In that same time, the Computer and Technology sector lost 6.98%, while the S&P 500 lost 6.59%.

Advanced Micro Devices will be looking to display strength as it nears its next earnings release. In that report, analysts expect Advanced Micro Devices to post earnings of $1.03 per share. This would mark year-over-year growth of 63.49%. Meanwhile, our latest consensus estimate is calling for revenue of $6.52 billion, up 69.43% from the prior-year quarter.

AMD's full-year Zacks Consensus Estimates are calling for earnings of $4.37 per share and revenue of $26.34 billion. These results would represent year-over-year changes of +56.63% and +60.25%, respectively.

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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 has moved 0.02% higher within the past month. Advanced Micro Devices currently has a Zacks Rank of #2 (Buy).

Investors should also note Advanced Micro Devices's current valuation metrics, including its Forward P/E ratio of 17.2. This represents a premium compared to its industry's average Forward P/E of 13.38.

Investors should also note that AMD has a PEG ratio of 0.61 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. AMD's industry had an average PEG ratio of 1.17 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 46, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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