Intel may be undervalued with poor growth indicators, but the 37 analysts following the company give it an rating of hold. Their target prices range from $15.41 to $40.79 per share, for an average of $31.29. At today's price of $35.77, Intel is trading 14.32% away from its average target price, suggesting there is an analyst belief that shares are overpriced for the stock.
Intel Corporation designs, develops, manufactures, markets, and sells computing and related products worldwide. Based in Santa Clara, CA, the large-cap Technology company has 131,900 full time employees. Intel has provided a 4.0% dividend yield over the last 12 months.
Since Intel has negative earnings per share, its P/E ratio is not meaningful. Based on its positive EPS guidance of 1.58, however, the company has a forward P/E ratio of 22.6. The average P/E ratio for the Technology sector is 27.16.
On the other hand, the market is potentially undervaluing Intel in terms of its book value because its P/B ratio is 1.52. In comparison, the sector average P/B ratio is 6.23.
The question is, why does Intel have a bad rating if it is apparently undervalued in terms of traditional metrics? One reason could be the company's disappointing rate of margin growth, which in the analysts' opinion, will continue in coming years.
| 2020-01-24 | 2021-01-22 | 2022-01-27 | 2023-01-27 | |
|---|---|---|---|---|
| Revenue (MM) | $71,965 | $77,867 | $79,024 | $63,054 |
| Gross Margins | 58.6% | 56.0% | 55.4% | 42.6% |
| Operating Margins | 31.2% | 30.7% | 27.9% | 3.7% |
| Net Margins | 29.25% | 26.84% | 25.14% | 12.71% |
| Net Income (MM) | $21,048 | $20,899 | $19,868 | $8,014 |
| Net Interest Expense (MM) | n/a | n/a | n/a | n/a |
| Depreciation & Amort. (MM) | -$10,826 | -$12,239 | -$11,792 | -$13,035 |
| Earnings Per Share | $4.71 | $4.94 | $4.85 | -$0.7 |
| EPS Growth | n/a | 4.88% | -1.82% | -114.43% |
| Diluted Shares (MM) | 4,473 | 4,232 | 4,095 | 4,171 |
| Free Cash Flow (MM) | $49,358 | $50,123 | $48,189 | $40,277 |
| Capital Expenditures (MM) | -$16,213 | -$14,259 | -$18,733 | -$24,844 |
| Net Current Assets (MM) | -$27,781 | -$24,804 | -$14,457 | -$28,410 |
| Current Ratio | 1.4 | 1.91 | 2.13 | 1.57 |
| Long Term Debt (MM) | $25,308 | $33,897 | $33,510 | $37,684 |
| LT Debt to Equity | 0.33 | 0.42 | 0.35 | 0.36 |
