In the latest trading session, Advanced Micro Devices (AMD) closed at $88.75, marking a -0.78% move from the previous day. This change lagged the S&P 500's daily gain of 1.39%. Meanwhile, the Dow gained 0.83%, and the Nasdaq, a tech-heavy index, added 1.97%.
Heading into today, shares of the chipmaker had lost 3.98% over the past month, lagging the Computer and Technology sector's gain of 3.17% and the S&P 500's gain of 2.58% in that time.
AMD will be looking to display strength as it nears its next earnings release, which is expected to be January 26, 2021. In that report, analysts expect AMD to post earnings of $0.47 per share. This would mark year-over-year growth of 46.88%. Our most recent consensus estimate is calling for quarterly revenue of $3.01 billion, up 41.69% from the year-ago period.
It is also important to note the recent changes to analyst estimates for AMD. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.52% lower within the past month. AMD is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note AMD's current valuation metrics, including its Forward P/E ratio of 49.71. This represents a premium compared to its industry's average Forward P/E of 22.65.
We can also see that AMD currently has a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Electronics - Semiconductors stocks are, on average, holding a PEG ratio of 1.45 based on yesterday's closing prices.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
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