Advanced Micro Devices (AMD) Stocks Fall While Market Gains: What You Need to Know

Advanced Micro Devices (AMD) closed the most recent trading day at $177.10, down 0.89% from the previous trading session. This move lagged the S&P 500’s 0.07% daily gain. Elsewhere, the Dow was down 0.13%, while the tech-heavy Nasdaq gained 0.14%.

Shares of the integrated circuit maker have gained 11.44% over the past month, outpacing the Computer and Technology sector’s gain of 8.61% and the S&P 500’s gain of 4.34%.

Market participants will be closely watching Advanced Micro Devices’ financial results in its upcoming release. The company is expected to report earnings per share (EPS) of $0.66, up 13.79% from the same quarter last year. Meanwhile, our latest consensus is for revenue of $5.71 billion, up 6.54% from the prior-year quarter.

For the full year, the Zacks Consensus Estimate is calling for earnings of $3.41 per share and revenue of $25.29 billion, which would represent changes of +28.68% and +11.51%, respectively, from the prior year.

It is also important for investors to be aware of any recent changes to analyst estimates for Advanced Micro Devices. These recent revisions reflect the evolving nature of near-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 moves in closely held stocks. To benefit from this, we have developed the Zacks Rank, a proprietary model that 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. Over the past 30 days, the Zacks Consensus EPS estimate has moved 0.03% higher. Advanced Micro Devices currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Advanced Micro Devices is currently trading at a Forward P/E ratio of 52.39. This represents a premium compared to its industry’s average Forward P/E ratio of 37.94.

It’s also worth mentioning that AMD has a PEG ratio of 1.58. 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. Electronics – Semiconductors maintained an average PEG ratio of 2.92 at yesterday’s closing price.

The Electronics – Semiconductors industry is a component of the Computers & Technology sector. This group has a Zacks Industry Rank of 207, which puts it in the bottom 18% 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.

Be sure to use Zacks.com to follow all of these stock price action metrics and more in the coming trading sessions.

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