In the latest trading session, Advanced Micro Devices (AMD – Free Report) closed at $80.89, marking a -0.57% move from the previous day. This change lagged the S&P 500’s daily gain of 0.02%.
Heading into today, shares of the chipmaker had gained 7.05% over the past month, outpacing the Computer and Technology sector’s gain of 2.08% and the S&P 500’s gain of 0.04% in that time.
Investors will be hoping for strength from AMD as it approaches its next earnings release. On that day, AMD is projected to report earnings of $0.54 per share, which would represent year-over-year growth of 200%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.61 billion, up 86.86% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.16 per share and revenue of $14.69 billion, which would represent changes of +67.44% and +50.46%, respectively, from the prior year.
Investors might also notice 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMD is currently a Zacks Rank #2 (Buy).
Valuation is also important, so investors should note that AMD has a Forward P/E ratio of 37.63 right now. For comparison, its industry has an average Forward P/E of 17.69, which means AMD is trading at a premium to the group.
Also, we should mention that AMD has a PEG ratio of 1.07. 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. Electronics – Semiconductors stocks are, on average, holding a PEG ratio of 1.63 based on yesterday’s closing prices.
The Electronics – Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.