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Advanced Micro Devices (AMD) Fall More Than Broader Markets: What You Need to Know

In the latest trading session, Advanced Micro Devices (AMD) closed at $65.41, marking a decline of 1.68% from the previous day. The move lagged the S&P 500’s daily loss of 1.11%. Meanwhile, the Dow lost 0.85% and the Nasdaq, a technology-based index, gained 0.1%.

As of today, shares of the chipmaker have lost 9.97% in the past month. During the same period, the Computer and Technology sector lost 4.59%, while the S&P 500 lost 2.19%.

Advanced Micro Devices will be looking to show strength as it approaches its next earnings release. The company is expected to report EPS of $0.67, down 27.17% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.53 billion, up 14.5% from the year-ago period.

For the full year, our Zacks Consensus Estimates suggest that analysts are expecting earnings of $3.49 per share and revenue of $23.53 billion. These totals would represent changes of +25.09% and +43.17%, respectively, compared to last year.

Also note the recent changes to analyst estimates for Advanced Micro Devices. These changes help highlight the ever-changing nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Research indicates that these estimate changes are directly correlated with near-term stock price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. The Zacks Consensus EPS estimate has remained unchanged within the past month. Advanced Micro Devices is currently sporting a Zacks Rank #3 (Hold).

Looking at the valuation, Advanced Micro Devices currently has a Forward P/E of 19.06. Within this industry, the average Forward P/E is 14.37, so we can say that Advanced Micro Devices is trading at a comparable premium.

It’s also worth noting that AMD currently has a PEG ratio of 1.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account a stock’s expected earnings growth rate. As of yesterday’s close, the average PEG ratio for the Electronics and Semiconductors industry was 1.95.

The Electronics and Semiconductors industry is part of the Computers and Technology sector. This industry currently has a Zacks Industry Rank of 163, which puts it in the bottom 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 industries that receive a top 50% rating outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock moving metrics and more on Zacks.com.

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