AMD Stock Analysis (NASDAQ:AMD)
AMD Analysis Video
AMD’s stock performance since the listing in the 19070’s can only be termed as erratic. It has been unpredictable in terms of top line growth, with swings in market share and growth coming in spurts and then crashing. AMD revenue showed signs of improvements in 2016, with steady growth for two quarters in a row. The company’s new range of chips also generated some excitement during that year. It remains to be seen if AMD continues this streak in the coming years.
Advanced Micro Devices, Inc. Stock Rating (1.8/5)
Should you buy AMD stock?
- The lower PS ratio 1.9 for AMD stock versus Electronics-Semiconductors industry average of 2.4 is a positive for the company.
- The LTM ROE of 214.2% for AMD is attractive.
Should you sell AMD stock?
- The company saw an average annual sales decline of in sales over the last 5 years.
- AMD registered a negative operating margin of -10.1% (average) over the Trailing Twelve Months (TTM).
- AMD registered an average TTM Net loss of -13.3%.
- AMD is debt laden and has a high debt/equity ratio of 4.84.
- The company does not have profits. Hence the PE ratio is meaningless for AMD stock.
- The company has a negative Return on Invested Capital of -24.9%, which is a red flag.
AMD stock analysis must include the growth potential of the semiconductor market. However, in case of AMD, since the company doesn’t really have a major dominance in terms of market share, that aspect may become less important. For instance, in the GPU graphics cards market, for Add-In-Boards (AIBs), which use discrete graphics cards, AMD has a small share of the market, whereas NVIDIA accounts for nearly all of the rest. So, in that sense, AMD doesn’t have much of a moat, so to say, as things stand. AMD analysis shows that the firm has been rather unstable in the past. AMD stock price analysis shows the ups and downs faced by the tech company, especially around year 2000, around the time of the dotcom bust. A look at the market in which AMD operates, shows that the company faces significant pressures from peers like Intel and NVIDIA, among many others.
AMD PE ratio chart is of lesser relevance now because AMD has been recording losses, but if the company does recover, then it can be a handle tool, which prospective investors can use while evaluating the company. AMD price history shows an unstable growth pattern since listing. A serious turnaround could make the stock a more luring target for tech investors.