Advanced Micro Devices (AMD) Dips More Than Broader Markets: What You Should Know
In the latest trading session, Advanced Micro Devices (AMD) closed at $27.33, marking a -1.87% move from the previous day. This move lagged the S&P 500's daily loss of 0.06%. At the same time, the Dow lost 0.1%, and the tech-heavy Nasdaq lost 0.1%.
Prior to today's trading, shares of the chipmaker had gained 22.04% over the past month. This has outpaced the Computer and Technology sector's gain of 5.14% and the S&P 500's gain of 4.3% in that time.
Investors will be hoping for strength from AMD as it approaches its next earnings release. The company is expected to report EPS of $0.05, down 54.55% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.26 billion, down 23.78% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.64 per share and revenue of $6.79 billion. These totals would mark changes of +39.13% and +4.82%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for AMD. 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
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 remained stagnant within the past month. AMD is currently a Zacks Rank #4 (Sell).
Investors should also note AMD's current valuation metrics, including its Forward P/E ratio of 43.23. This valuation marks a premium compared to its industry's average Forward P/E of 20.
It is also worth noting that AMD currently has a PEG ratio of 1.41. 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. The Electronics - Semiconductors industry currently had an average PEG ratio of 1.58 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 219, which puts it in the bottom 15% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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