In the latest trading session, Advanced Micro Devices (AMD) closed at $92.92, marking a -1.22% move from the previous day. This change lagged the S&P 500’s 0.28% gain on the day. At the same time, the Dow added 0.35%, and the tech-heavy Nasdaq gained 0.5%.
Prior to today’s trading, shares of the chipmaker had gained 13.17% over the past month. This has outpaced the Computer and Technology sector’s gain of 4.61% and the S&P 500’s gain of 5.42% in that time.
AMD will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMD to post earnings of $0.46 per share. This would mark year-over-year growth of 43.75%. Meanwhile, our latest consensus estimate is calling for revenue of $3 billion, up 41.27% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.23 per share and revenue of $9.52 billion. These totals would mark changes of +92.19% and +41.48%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for AMD. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 remained stagnant. AMD is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, AMD currently has a Forward P/E ratio of 76.64. Its industry sports an average Forward P/E of 29.94, so we one might conclude that AMD is trading at a premium comparatively.
Investors should also note that AMD has a PEG ratio of 1.55 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. Electronics – Semiconductors stocks are, on average, holding a PEG ratio of 1.55 based on yesterday’s closing prices.
The Electronics – Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 104, putting it in the top 41% 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.