AMD Stock Analysis, Valuation (NASDAQ:AMD)

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$13.41 $0.33 (2.4%) AMD stock closing price Sep 21, 2017 (Closing)
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AMD
Updated on : Sep 21, 2017
previous close
AMD 13.4 (0%)
NASDAQ 6422.7 (0%)
Closing Price On: Sep 21, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Electronics-Semiconductors
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q2
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
-6.3%
Operating Profit
Operating Margin:
-6.5%
Sector Average:
5.8%
5 Quarter Net Profit
Net Margins
2017-Q2
%
LTM Margin
Debt/Equity Ratio
Debt:
1.42B
Debt/Equity Ratio:
 3.4
Compared to the industry
Cash Flow
Operating cash flow:
-$82M
Net Income:
-$16M
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
High Debt Burden
ROIC
ROE
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
PE: N/A
AMD PS :
2.7
Industry PS :
2.7
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
-20.7%
Return on Equity:
-224.9%
Free Cash Flow Margin:
-7.7%
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AMD Stock Analysis

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AMD’s stock performance since the listing in the 1970’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.

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Advanced Micro Devices, Inc. Stock Rating 1.7/5

Our AMD stock opinion is based on fundamentals of the company. This AMD stock analysis is based on latest 2017 Q2 earnings. The stock price analysis takes into account the company's valuation metrics.

Should you buy AMD stock?

  • AMD sales grew by 19% year on year in 2017 Q2.

Should you sell AMD stock?

  • Sales declined by -6.3% annually over the last 5 years.
  • AMD registered a negative operating margin of -6.5% (average) over the Trailing Twelve Months (TTM).
  • Over the last 12 months, AMD had an average Net loss of -11.8%.
  • With a debt/equity ratio of  3.4, AMD is highly leveraged in comparison to Computer and Technology peers.
  • The lack of profits renders the PE ratio useless for AMD stock.
  • AMD has a negative ROIC (Return on Invested Capital) of -20.7%.
  • AMD has a negative return on equity of -224.9%. This indicates that the firm is inefficient at generating profits.
  • The company has a negative free cash flow margin of -7.7%.

Comments on this video and AMD stock

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.

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