Advanced Micro Devices, Inc. (NASDAQ:AMD) saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Advanced Micro Devices’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Advanced Micro Devices
What Is Advanced Micro Devices Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 1.43% above our intrinsic value, which means if you buy Advanced Micro Devices today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $160.97, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Advanced Micro Devices’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Advanced Micro Devices generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Advanced Micro Devices' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in AMD’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on AMD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Advanced Micro Devices.
If you are no longer interested in Advanced Micro Devices, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Based on 34 Wall Street analysts offering 12 month price targets for Advanced Micro Devices in the last 3 months. The average price target is $194.93 with a high forecast of $250.00 and a low forecast of $140.00. The average price target represents a 42.83% change from the last price of $136.48.
The 29 analysts with 12-month price forecasts for AMD stock have an average target of 195.93, with a low estimate of 145 and a high estimate of 265. The average target predicts an increase of 50.43% from the current stock price of 130.25.
According to our Microvast Holdings, Inc. stock prediction for 2025, MVST stock will be priced at $ 0.322792 in 2025. This forecast is based on the stock's average growth over the past 10 years.
For the third quarter of 2024, AMD expects revenue to be approximately $6.7 billion, plus or minus $300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 16% and sequential growth of approximately 15%. Non-GAAP gross margin is expected to be approximately 53.5%.
AMD gross profit for the twelve months ending June 30, 2024 was $11.082B, a 15.93% increase year-over-year. AMD annual gross profit for 2023 was $10.46B, a 1.35% decline from 2022.
As of 2024-08-05, the Fair Value of Advanced Micro Devices Inc (AMD) is 17.26 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 132.5 USD, the upside of Advanced Micro Devices Inc is -87%.
As of 2024-08-05, the Intrinsic Value of Advanced Micro Devices Inc (AMD) is 20.73 USD. This AMD valuation is based on the model Discounted Cash Flows (Growth Exit 5Y). With the current market price of 132.50 USD, the upside of Advanced Micro Devices Inc is %.
The all-time high AMD stock closing price was 211.38 on March 07, 2024. The AMD 52-week high stock price is 227.30, which is 71.5% above the current share price. The AMD 52-week low stock price is 93.11, which is 29.7% below the current share price. The average AMD stock price for the last 52 weeks is 144.67.
Advanced Micro Devices is forecast to grow earnings and revenue by 39.7% and 17.7% per annum respectively. EPS is expected to grow by 39.4% per annum. Return on equity is forecast to be 15.5% in 3 years.
Analysts currently expect AMD earnings to grow by an average of 33% annually over the next three to five years. Using estimated 2024 earnings, AMD trades at a forward P/E ratio of 40. The stock offers solid value today if AMD delivers growth on par with estimates.
That's not unrealistic, and the AMD share price will probably revisit $200, eventually. Remember, the stock has a 52-week high of $227.30. Curtis expects to see a strong “upcycle” in the semiconductor market, and that's a realistic assumption. Investors shouldn't get so excited that they over-invest in AMD stock.
According to the latest long-term forecast, AMD price will hit $150 by the end of 2024 and then $250 by the end of 2026. AMD will rise to $300 within the year of 2028, $350 in 2029, $450 in 2030 and $500 in 2033.
Based on short-term price targets offered by 22 analysts, the average price target for Microchip Technology comes to $102.00. The forecasts range from a low of $88.00 to a high of $115.00. The average price target represents an increase of 35.22% from the last closing price of $75.43.
Based on 3 Wall Street analysts offering 12 month price targets for 9 Meters Biopharma in the last 3 months. The average price target is $0.75 with a high forecast of $0.75 and a low forecast of $0.75.
Mckesson Corp. has a consensus rating of Strong Buy which is based on 13 buy ratings, 2 hold ratings and 0 sell ratings. The average price target for Mckesson Corp. is $628.87. This is based on 15 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
Micron Technology reported terrific growth and its guidance is solid. The booming demand for Micron's AI-focused high-bandwidth memory will help it sustain its strong growth momentum. Future elevated earnings growth combined with an attractive valuation makes the stock worth buying right now.
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