Advanced Micro Devices (AMD) Stock Sinks As Market Gains: What You Should Know
In the latest trading session, Advanced Micro Devices (AMD) closed at $77.70, marking a -0.31% move from the previous day. This change lagged the S&P 500's daily gain of 1.05%. Elsewhere, the Dow gained 0.52%, while the tech-heavy Nasdaq added 1.72%.
Prior to today's trading, shares of the chipmaker had lost 6.19% over the past month. This has lagged the Computer and Technology sector's loss of 4.28% and the S&P 500's loss of 3.29% 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 $0.36, up 100% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.56 billion, up 42% from the prior-year quarter.
AMD's full-year Zacks Consensus Estimates are calling for earnings of $1.10 per share and revenue of $8.89 billion. These results would represent year-over-year changes of +71.88% and +32.03%, respectively.
Investors might also notice recent changes to analyst estimates for AMD. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AMD is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that AMD has a Forward P/E ratio of 70.69 right now. Its industry sports an average Forward P/E of 18.81, so we one might conclude that AMD is trading at a premium comparatively.
It is also worth noting that AMD currently has a PEG ratio of 1.54. 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 was holding an average PEG ratio of 1.64 at yesterday's closing price.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 91, which puts it in the top 36% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.