Advanced Micro Devices (AMD) Outperforms Stock Market Gains: What You Need to Know

Advanced Micro Devices (AMD) ended the most recent trading day at $51.43, moving -0.74% from the previous trading session. This change outpaced the S&P 500 Index’s daily gain of 0.03%. Meanwhile, the Dow lost 0.03% and the Nasdaq, a technology-based index, gained 0.14%.

Heading into today, shares of the chipmaker have gained 9.69% over the past month, outpacing the Computer & Technology sector’s gain of 6.3% and the S&P 500’s gain of 3.23% in that time.

Investors will be hoping for AMD’s strength ahead of its upcoming earnings release on January 28, 2020. The company is expected to report EPS of $0.30, up 275% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.10 billion, up 48.09% from the year-ago period.

It’s also important to note recent changes to analyst estimates for AMD. Recent changes usually reflect the latest short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business prospects.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.54% lower within the past month. AMD is currently sporting a Zacks Rank of #3 (Hold).

Looking at the valuation, AMD currently has a Forward P/E of 46.87. For comparison, the industry’s average P/E is 22.91, which means AMD is trading at a premium to the group.

It is also worth mentioning that AMD has a PEG ratio of 1.94. The PEG ratio is similar to the commonly used P/E ratio, but this metric also takes into account the company’s expected earnings growth rate. As of yesterday’s close, the average PEG ratio for the AMD industry was 1.94.

The Electronics and Semiconductors industry is part of the Computers and Technology sector. This group has a Zacks Industry Rank of 22, putting it in the top 9% of all 250+ industries.

The Zacks Industry Rank ranks from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that industries that score in the top 50% outperform the bottom half by a 2 to 1 margin.

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

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