Advanced Micro Devices (AMD) Stock Sinks As Market Gains: What You Should Know

Advanced Micro Devices (AMD) closed the most recent trading day at $109.99, moving -0.66% from the previous trading session. This change lagged the S&P 500’s daily gain of 0.03%.

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Prior to today’s trading, shares of the chipmaker had lost 1.63% over the past month. This has lagged the Computer and Technology sector’s gain of 4.78% and the S&P 500’s gain of 3.02% in that time.

AMD will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.66, up 60.98% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.12 billion, up 47.06% from the prior-year quarter.

AMD’s full-year Zacks Consensus Estimates are calling for earnings of $2.50 per share and revenue of $15.66 billion. These results would represent year-over-year changes of +93.8% and +60.43%, respectively.

It is also important to note the recent changes to analyst estimates for AMD. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

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.

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 sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, AMD currently has a Forward P/E ratio of 44.25. For comparison, its industry has an average Forward P/E of 20.36, which means AMD is trading at a premium to the group.

Investors should also note that AMD has a PEG ratio of 0.99 right now. 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 1.63 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 117, which puts it in the top 47% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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