Is Investing in Intel (INTC) a Wise Move? Find Out!

Intel shares fell by -1.2% during the day's morning session, and are now trading at a price of $36.27. 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:

Intel Corporation designs, develops, manufactures, markets, and sells computing and related products 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, Intel has a trailing 12 month P/E ratio of -157.7 and a P/B ratio of 1.5.

Intel's PEG ratio is 7.23, 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.

Shareholders Are Confronted With a Declining EPS Growth Trend:

2018-02-16 2019-02-01 2020-01-24 2021-01-22 2022-01-27 2023-01-27
Revenue (MM) $62,761 $70,848 $71,965 $77,867 $79,024 $63,054
Gross Margins 62.0% 62.0% 59.0% 56.0% 55.0% 43.0%
Operating Margins 28% 33% 31% 31% 28% 4%
Net Margins 15.0% 30.0% 28.0% 27.0% 25.0% 13.0%
Net Income (MM) $9,601 $21,053 $21,048 $20,899 $19,868 $8,014
Earnings Per Share $1.99 $4.48 $4.71 $4.94 $4.85 $1.94
EPS Growth n/a 125.13% 5.13% 4.88% -1.82% -60.0%
Diluted Shares (MM) 4,835 4,701 4,473 4,232 4,095 4,125
Free Cash Flow (MM) $33,888 $44,613 $49,358 $50,123 $48,189 $40,277
Capital Expenditures (MM) -$11,778 -$15,181 -$16,213 -$14,259 -$18,733 -$24,844
Net Current Assets (MM) -$24,730 -$24,613 -$27,781 -$24,804 -$14,457 -$28,410
Long Term Debt (MM) $25,037 $25,098 $25,308 $33,897 $33,510 $37,684
Net Debt / EBITDA 0.81 0.64 0.71 0.78 0.26 0.89

Intel has weak revenue growth and a flat capital expenditure trend, average net margins with a negative growth trend, and irregular cash flows. In addition, we note a decent current ratio. We also note that the company has healthy leverage working in its favor. However, the firm suffers from slimmer gross margins than its peers and declining EPS growth.

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.