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 | 176.54 | 4.25 | 10.44 | 0.47% | $1.12 | $2.86 | 8.88% |
| NVIDIA Corp | 53.15 | 47.82 | 29.31 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 29.55 | 7.30 | 11.35 | 6.67% | $474.12 | $358.12 | 40.07% |
| Broadcom Inc | 130.59 | 11.50 | 16.01 | -2.77% | $6.39 | $8.36 | 47.27% |
| Qualcomm Inc | 21.52 | 7.60 | 5.09 | 8.67% | $2.87 | $5.22 | 11.15% |
| Texas Instruments Inc | 34.78 | 10.65 | 11.44 | 6.59% | $1.76 | $2.21 | -15.65% |
| ARM Holdings PLC | 341.98 | 25.61 | 41.46 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 67.06 | 3.14 | 11.46 | 1.11% | $1.04 | $1.31 | -24.84% |
| Intel Corp | 86.54 | 0.77 | 1.60 | -1.46% | $0.86 | $4.55 | -0.9% |
| Monolithic Power Systems Inc | 102.40 | 19.10 | 22.20 | 4.66% | $0.13 | $0.28 | 15.03% |
| Microchip Technology Inc | 30.42 | 6.40 | 6.33 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 16.09 | 3.63 | 3.99 | 4.11% | $0.58 | $0.78 | -17.15% |
| First Solar Inc | 21.59 | 3.57 | 6.91 | 4.94% | $0.48 | $0.5 | 24.65% |
| STMicroelectronics NV | 7.36 | 1.42 | 1.71 | 3.51% | $1.31 | $1.15 | -25.29% |
| GLOBALFOUNDRIES Inc | 26.84 | 1.92 | 3.17 | 1.38% | $0.56 | $0.4 | -11.54% |
| United Microelectronics Corp | 12.62 | 1.88 | 2.95 | 3.76% | $27.9 | $19.98 | 0.89% |
| ASE Technology Holding Co Ltd | 19.16 | 2.19 | 1.14 | 2.62% | $26.08 | $23.07 | 2.91% |
| Skyworks Solutions Inc | 19.87 | 2.42 | 3.55 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 43.86 | 6.35 | 15.63 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 101.02 | 6.68 | 10.73 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 38.29 | 10.27 | 11.54 | 3.28% | $0.04 | $0.08 | -34.72% |
| Cirrus Logic Inc | 22.84 | 3.55 | 3.71 | 2.3% | $0.07 | $0.19 | 17.98% |
| Average | 58.45 | 8.75 | 10.54 | 4.46% | $26.9 | $21.48 | 7.93% |
By conducting an in-depth analysis of Advanced Micro Devices, we can identify the following trends:
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Notably, the current Price to Earnings ratio for this stock, 176.54, is 3.02x above the industry norm, reflecting a higher valuation relative to the industry.
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With a Price to Book ratio of 4.25, significantly falling below the industry average by 0.49x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio is 10.44, which is 0.99x the industry average. This suggests a possible undervaluation based on sales performance.
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With a Return on Equity (ROE) of 0.47% that is 3.99% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.12 Billion is 0.04x below the industry average, suggesting potential lower profitability or financial challenges.
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With lower gross profit of $2.86 Billion, which indicates 0.13x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company's revenue growth of 8.88% is notably higher compared to the industry average of 7.93%, showcasing exceptional sales performance and strong demand for its products or services.
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.
By analyzing Advanced Micro Devices in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Compared to its top 4 peers, Advanced Micro Devices has a stronger financial position indicated by its lower debt-to-equity ratio of 0.04.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For Advanced Micro Devices, the PE ratio is high compared to peers, indicating potentially overvalued stock. The PB and PS ratios are low, suggesting undervaluation relative to industry competitors. In terms of ROE, EBITDA, gross profit, and revenue growth, Advanced Micro Devices lags behind its peers, indicating weaker financial performance and growth prospects within the Semiconductors & Semiconductor Equipment industry.
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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