The latest trading session saw Advanced Micro Devices (AMD) close at $160.24, indicating a +0.81% correction from the last day’s close. That shift capped the S&P 500’s gain by 0.85% on the day. Meanwhile, the Dow fell 0.09%, and the tech-dominated Nasdaq rose 1.53%.
Shares of the chipmaker witnessed a gain of 3.79% over the past month, beating the performance of the Computer & 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 Advanced Micro Devices’ earnings performance in its next release. On that day, Advanced Micro Devices is expected to report earnings of $0.67 per share, which would represent a year-over-year increase of 15.52%. Together, our latest consensus estimate predicts revenue of $5.71 billion, indicating a 6.58% upward move from the same quarter last year.
Looking at the full year, Zacks Consensus Estimates suggest analysts expect 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 in analyst ratings for advanced micro devices. Recent revisions tend to reflect the latest short-term business trends. Consequently, upward revisions in ratings express analysts’ positivity toward the company’s business operations and its ability to generate earnings.
Our research suggests that these changes in valuations have a direct correlation with future stock price performance. To take advantage of this, we’ve developed Zacks Rank, a proprietary model that takes these rating 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 externally audited track record of performance, with the #1 stock generating an average annual return of +25% since from 1988. Over the past month, the Zacks Consensus EPS Estimate has decreased 0.22% below. As of now, Advanced Micro Devices maintains 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 indicates a premium relative to the industry average Forward P/E of 40.04.
We can also note 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. Electronics – Semiconductors carried an average PEG ratio of 2.9 at yesterday’s closing price.
The Electronics – Semiconductor industry is part of the Computers and Technology sector. This group has a Zacks Industry Rank of 164, placing it in the bottom 35% of all 250+ industries.
The Zacks Industry Rank evaluates the strength of our particular industry groups by calculating the average of the Zacks Ranks of the individual stocks included within the groups. Our research shows that industries rated in the top 50% outperform the bottom half by a factor of 2 to 1.
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