Advanced Micro Devices shares fell by -1.6% during the day's morning session, and are now trading at a price of $100.21. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 27.16 and an average price to book (P/B) ratio of 6.23. In contrast, Advanced Micro Devices has a trailing 12 month P/E ratio of -2505.2 and a P/B ratio of 2.93.
Advanced Micro Devices's PEG ratio is 4.86, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Has a Positive Net Current Asset Value:
| 2018-02-27 | 2019-02-08 | 2020-02-04 | 2021-01-29 | 2022-02-03 | 2023-02-27 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $5,253 | $6,475 | $6,731 | $9,763 | $16,434 | $23,601 |
| Gross Margins | 34.0% | 38.0% | 43.0% | 45.0% | 48.0% | 45.0% |
| Operating Margins | 1% | 7% | 8% | 14% | 22% | 5% |
| Net Margins | -1.0% | 5.0% | 5.0% | 26.0% | 19.0% | 6.0% |
| Net Income (MM) | -$33 | $337 | $341 | $2,490 | $3,162 | $1,320 |
| Net Interest Expense (MM) | -$126 | -$121 | -$94 | -$47 | -$34 | -$88 |
| Depreciation & Amort. (MM) | -$144 | -$170 | -$222 | -$312 | -$407 | -$4,174 |
| Earnings Per Share | -$0.03 | $0.32 | $0.3 | $2.06 | $2.57 | $0.84 |
| EPS Growth | n/a | 1166.67% | -6.25% | 586.67% | 24.76% | -67.32% |
| Diluted Shares (MM) | 1,039 | 1,064 | 1,120 | 1,207 | 1,230 | 1,571 |
| Free Cash Flow (MM) | $125 | $197 | $710 | $1,365 | $3,822 | $4,015 |
| Capital Expenditures (MM) | -$113 | -$163 | -$217 | -$294 | -$301 | -$450 |
| Net Current Assets (MM) | -$322 | $250 | $1,396 | $3,018 | $3,661 | $2,189 |
| Long Term Debt (MM) | $1,325 | $1,114 | $486 | $330 | $1 | $2,467 |
Advanced Micro Devices has slimmer gross margins than its peers, weak operating margins with a positive growth rate, and declining EPS growth. On the other hand, the company benefits from a pattern of improving cash flows and an excellent current ratio. Furthermore, Advanced Micro Devices has weak revenue growth and a flat capital expenditure trend and an average amount of debt.
