Advanced Micro Devices (AMD) closed at $25.05 in the latest trading session, marking a -0.91% move from the prior day. The stock lagged the S&P 500’s daily gain of 0.03%. At the same time, the Dow added 0.06%, and the tech-heavy Nasdaq gained 0.15%.
Prior to today’s trading, shares of the chipmaker had gained 30.07% over the past month. This has outpaced the Computer and Technology sector’s gain of 3.49% and the S&P 500’s gain of 2.98% in that time.
Investors will be hoping for strength from AMD as it approaches its next earnings release, which is expected to be October 23, 2018. In that report, analysts expect AMD to post earnings of $0.12 per share. This would mark year-over-year growth of 20%. Meanwhile, our latest consensus estimate is calling for revenue of $1.71 billion, up 3.95% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.47 per share and revenue of $6.69 billion. These totals would mark changes of +176.47% and +25.53%, respectively, from last year.
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 a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.21% lower. AMD currently has a Zacks Rank of #3 (Hold).
Digging into valuation, AMD currently has a Forward P/E ratio of 53.95. Its industry sports an average Forward P/E of 18.3, so we one might conclude that AMD is trading at a premium comparatively.
Investors should also note that AMD has a PEG ratio of 6.96 right now. 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 1.46 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 78, which puts it in the top 31% 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.
To follow AMD in the coming trading sessions, be sure to utilize Zacks.com.
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