Consider This Before Taking a Position in Intel (INTC)

Intel logged a 0.18% change during today's afternoon session, and is now trading at a price of $25.61 per share.

Intel shares moved -42.73% over the last 52 weeks, with a high of $50.28 and a low of $23.97. During this time, the stock lagged the S&P 500 index by -34.23%. As of January 2022, the company's 50-day average price is $28.12. Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California, in Silicon Valley. The large-cap Consumer Cyclical company is based in Santa Clara, CA. Intel has returned a 5.73% dividend yield over the last 12 months.

Declining EPS Growth Trend with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $71,052 $76,984 $78,168 $61,811
Revenue Growth n/a 8.35% 1.54% -20.93%
Gross Margins 59.31% 56.65% 56.05% 43.46%
Gross Margins Growth n/a -4.48% -1.06% -22.46%
Operating Margins 31.01% 30.76% 24.89% 3.78%
Operating Margins Growth n/a -0.81% -19.08% -84.81%
Earnings Per Share $4.91 $5.15 $4.88 $1.94
EPS Growth n/a 4.89% -5.24% -60.25%
Free Cash Flow (MM) $16,932 $21,125 $10,723 -$9,411
FCF Growth n/a 24.76% -49.24% -187.76%
Capital Expenditures (MM) $16,213 $14,259 $18,733 $24,844
Net Debt / EBITDA 1.15 1.2 1.38 3.04

Intel Is Reasonably Priced:

Compared to the Consumer Cyclical sector's average of 22.33, Intel has a trailing twelve month P/E ratio of 13.13 and, according to its EPS guidance of 1.7, an expected P/E ratio of 15.04. The company doesn't issue forward earnings guidance, and the annual average growth rate of its last 5 years of reported EPS is -13.75%. On this basis, the company's PEG ratio is -0.95, which indicates that its shares are overpriced.

However, Intel is likely undervalued in terms of its equity because its P/B ratio is 1.168 compared to its sector average of 3.12. The company's shares are currently trading 0% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 4.31 * 24.52) = $48.76

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.