In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Advanced Micro Devices AMD against its key competitors in the Semiconductors & Semiconductor Equipment industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within 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 | 162.82 | 3.92 | 9.62 | 0.47% | $1.12 | $2.86 | 8.88% |
| NVIDIA Corp | 63.79 | 54.57 | 34.08 | 32.31% | $17.75 | $20.41 | 262.12% |
| Broadcom Inc | 64.03 | 9.89 | 15.67 | 3.02% | $5.58 | $7.78 | 42.99% |
| Qualcomm Inc | 20.83 | 7.36 | 4.92 | 8.67% | $2.87 | $5.22 | 11.15% |
| Texas Instruments Inc | 33.29 | 10.19 | 10.94 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 289.51 | 21.68 | 35.10 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 49.55 | 2.99 | 10.14 | 0.85% | $0.93 | $1.18 | -33.83% |
| Intel Corp | 80.67 | 0.72 | 1.49 | -1.46% | $0.86 | $4.55 | -0.9% |
| Microchip Technology Inc | 30.45 | 6.40 | 6.33 | 1.98% | $0.41 | $0.74 | -45.76% |
| Monolithic Power Systems Inc | 98.09 | 18.29 | 21.26 | 4.66% | $0.13 | $0.28 | 15.03% |
| ON Semiconductor Corp | 16.03 | 3.61 | 3.97 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 9.11 | 1.55 | 1.79 | 2.07% | $0.45 | $1.3 | -25.29% |
| GLOBALFOUNDRIES Inc | 29.61 | 2.12 | 3.49 | 1.38% | $0.56 | $0.4 | -11.54% |
| First Solar Inc | 19.57 | 3.23 | 6.26 | 4.94% | $0.48 | $0.5 | 24.65% |
| United Microelectronics Corp | 13.08 | 1.94 | 3.06 | 3.76% | $27.9 | $19.98 | 0.89% |
| ASE Technology Holding Co Ltd | 19.12 | 2.18 | 1.13 | 2.62% | $26.08 | $23.07 | 2.91% |
| Skyworks Solutions Inc | 21.17 | 2.58 | 3.78 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 36.83 | 5.33 | 13.12 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 102.60 | 6.78 | 10.90 | 1.88% | $0.04 | $0.1 | 28.25% |
| Cirrus Logic Inc | 24.55 | 3.82 | 3.99 | 2.3% | $0.07 | $0.19 | 17.98% |
| Lattice Semiconductor Corp | 33.82 | 9.07 | 10.19 | 3.28% | $0.04 | $0.08 | -34.72% |
| Average | 52.79 | 8.72 | 10.08 | 4.62% | $4.35 | $4.51 | 12.65% |
Through a meticulous analysis of Advanced Micro Devices, we can observe the following trends:
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Notably, the current Price to Earnings ratio for this stock, 162.82, is 3.08x above the industry norm, reflecting a higher valuation relative to the industry.
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The current Price to Book ratio of 3.92, which is 0.45x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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With a relatively low Price to Sales ratio of 9.62, which is 0.95x the industry average, the stock might be considered undervalued based on sales performance.
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With a Return on Equity (ROE) of 0.47% that is 4.15% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.12 Billion, which is 0.26x below the industry average, potentially indicating lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $2.86 Billion, which indicates 0.63x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company is witnessing a substantial decline in revenue growth, with a rate of 8.88% compared to the industry average of 12.65%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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.
When assessing Advanced Micro Devices against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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In terms of the debt-to-equity ratio, Advanced Micro Devices has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.04.
Key Takeaways
The PE, PB, and PS ratios for Advanced Micro Devices indicate that it may be overvalued compared to its peers in the Semiconductors & Semiconductor Equipment industry. The low ROE, EBITDA, gross profit, and revenue growth suggest that the company may be facing challenges in generating profits and growth relative to its industry counterparts.
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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