Advanced Micro Devices (AMD) closed the most recent trading day at $57, moving -0.8% from the previous trading session. This move lagged the S&P 500’s daily gain of 0.17%. Elsewhere, the Dow gained 0.6%, while the tech-heavy Nasdaq lost 0.81%.
Prior to today’s trading, shares of the chipmaker had gained 4.93% over the past month. This has lagged the Computer and Technology sector’s gain of 7.91% and the S&P 500’s gain of 5.15% in that time.
Investors will be hoping for strength from AMD as it approaches its next earnings release, which is expected to be July 28, 2020. In that report, analysts expect AMD to post earnings of $0.16 per share. This would mark year-over-year growth of 100%. Our most recent consensus estimate is calling for quarterly revenue of $1.85 billion, up 21% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $1.01 per share and revenue of $8.39 billion, which would represent changes of +57.81% and +24.63%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for AMD. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.72% higher within the past month. AMD is currently sporting a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that AMD has a Forward P/E ratio of 56.79 right now. This represents a premium compared to its industry’s average Forward P/E of 21.58.
We can also see that AMD currently has a PEG ratio of 1.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. AMD’s industry had an average PEG ratio of 1.78 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 107, which puts it in the top 43% 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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