Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Advanced Micro Devices AMD in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Advanced Micro Devices Background
Advanced Micro Devices designs a variety of digital semiconductors for markets such as PCs, gaming consoles, data centers, industrial, and automotive applications, among others. AMD's traditional strength was in central processing units, CPUs, and graphics processing units, or GPUs, used in PCs and data centers. Additionally, the firm supplies the chips found in prominent game consoles such as the Sony PlayStation and Microsoft Xbox. In 2022, the firm acquired field-programmable gate array, or FPGA, leader Xilinx to diversify its business and augment its opportunities in key end markets such as the data center and automotive.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Advanced Micro Devices Inc | 298.77 | 4.58 | 11.35 | 1.2% | $1.22 | $2.91 | 10.16% |
| NVIDIA Corp | 72.38 | 50.23 | 35.35 | 32.23% | $14.56 | $16.79 | 265.28% |
| Broadcom Inc | 48.27 | 8.57 | 14.59 | 2.81% | $4.61 | $7.38 | 34.17% |
| Qualcomm Inc | 23.66 | 8.03 | 5.14 | 12.4% | $3.58 | $5.62 | 4.99% |
| Texas Instruments Inc | 27.46 | 9.45 | 9.62 | 6.52% | $1.77 | $2.1 | -16.4% |
| Intel Corp | 31.41 | 1.22 | 2.34 | -0.36% | $1.83 | $5.22 | -17.41% |
| ARM Holdings PLC | 1224.13 | 20.79 | 35.42 | 1.78% | $0.18 | $0.79 | 13.81% |
| Analog Devices Inc | 35.82 | 2.80 | 8.72 | 1.3% | $1.12 | $1.47 | -22.68% |
| Microchip Technology Inc | 21.49 | 7.02 | 5.92 | 5.97% | $0.75 | $1.12 | -18.6% |
| STMicroelectronics NV | 10.14 | 2.09 | 2.26 | 3.04% | $0.55 | $1.44 | -18.41% |
| Monolithic Power Systems Inc | 76.39 | 15.89 | 17.92 | 4.85% | $0.12 | $0.25 | -1.3% |
| ON Semiconductor Corp | 14.32 | 3.72 | 3.82 | 5.7% | $0.71 | $0.85 | -4.95% |
| GLOBALFOUNDRIES Inc | 26.68 | 2.43 | 3.67 | 2.53% | $0.73 | $0.53 | -11.76% |
| ASE Technology Holding Co Ltd | 20.40 | 2.43 | 1.22 | 1.94% | $23.55 | $20.87 | 1.46% |
| United Microelectronics Corp | 10.41 | 1.83 | 2.79 | 3.43% | $23.32 | $17.81 | -18.98% |
| First Solar Inc | 22.78 | 2.82 | 5.70 | 5.38% | $0.47 | $0.5 | 15.58% |
| Skyworks Solutions Inc | 18.90 | 2.75 | 3.68 | 3.76% | $0.37 | $0.51 | -9.61% |
| Lattice Semiconductor Corp | 43.97 | 13.82 | 13.79 | 2.15% | $0.03 | $0.1 | -17.46% |
| Universal Display Corp | 37.24 | 5.18 | 13.04 | 4.36% | $0.08 | $0.12 | -6.34% |
| MACOM Technology Solutions Holdings Inc | 98 | 7.17 | 11.69 | 1.27% | $0.03 | $0.09 | -12.75% |
| Rambus Inc | 16.70 | 6 | 13.02 | 3.24% | $0.03 | $0.09 | -3.56% |
| Average | 94.03 | 8.71 | 10.48 | 5.21% | $3.92 | $4.18 | 7.75% |
Upon closer analysis of Advanced Micro Devices, the following trends become apparent:
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The current Price to Earnings ratio of 298.77 is 3.18x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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With a Price to Book ratio of 4.58, significantly falling below the industry average by 0.53x, it suggests undervaluation and the possibility of untapped growth prospects.
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The stock's relatively high Price to Sales ratio of 11.35, surpassing the industry average by 1.08x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a lower Return on Equity (ROE) of 1.2%, which is 4.01% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.22 Billion, which is 0.31x below the industry average. This potentially indicates lower profitability or financial challenges.
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The gross profit of $2.91 Billion is 0.7x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 10.16% exceeds the industry average of 7.75%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, Advanced Micro Devices stands in comparison with its top 4 peers, leading to the following comparisons:
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Advanced Micro Devices is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.05.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
Key Takeaways
For Advanced Micro Devices, the PE ratio is high compared to peers, indicating potentially overvalued stock. The PB ratio is low, suggesting the stock may be undervalued based on its assets. The PS ratio is high, implying investors are paying more for each dollar of revenue generated. In terms of ROE, EBITDA, gross profit, and revenue growth, Advanced Micro Devices lags behind its industry peers, indicating weaker financial performance and growth prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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