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. AMD's traditional strength was in central processing units and graphics processing units 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 leader Xilinx to diversify its business and augment its opportunities in key end markets such as 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 | 127.50 | 4.10 | 9.69 | 1.36% | $1.55 | $3.42 | 17.57% |
| NVIDIA Corp | 62.24 | 56 | 34.33 | 30.94% | $19.71 | $22.57 | 122.4% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.80 | 7.93 | 12.98 | 8.36% | $360.77 | $439.35 | 38.95% |
| Broadcom Inc | 137.10 | 12.08 | 16.81 | -2.77% | $6.39 | $8.36 | 47.27% |
| Texas Instruments Inc | 37.76 | 10.73 | 11.87 | 7.9% | $1.76 | $2.21 | 8.61% |
| Qualcomm Inc | 20.82 | 7.35 | 4.92 | 8.67% | $2.87 | $5.22 | 11.15% |
| ARM Holdings PLC | 349.13 | 26.14 | 42.33 | 4.07% | $0.23 | $0.91 | 39.11% |
| Analog Devices Inc | 67.20 | 3.15 | 11.48 | 1.11% | $1.04 | $1.31 | -24.84% |
| Micron Technology Inc | 142.36 | 2.45 | 4.44 | 1.99% | $3.63 | $2.74 | 93.27% |
| Microchip Technology Inc | 29.23 | 6.14 | 6.08 | 1.98% | $0.41 | $0.74 | -45.76% |
| ON Semiconductor Corp | 17.49 | 3.50 | 4.16 | 4.11% | $0.58 | $0.78 | -17.15% |
| STMicroelectronics NV | 11.17 | 1.39 | 1.79 | 3.51% | $1.31 | $1.15 | -25.29% |
| First Solar Inc | 16.76 | 2.74 | 5.43 | 4.22% | $0.45 | $0.45 | 10.81% |
| ASE Technology Holding Co Ltd | 18.68 | 2.14 | 1.12 | 2.62% | $26.08 | $23.07 | 2.91% |
| GLOBALFOUNDRIES Inc | 25.01 | 1.79 | 2.95 | 1.38% | $0.56 | $0.4 | -11.54% |
| United Microelectronics Corp | 10.38 | 1.54 | 2.43 | 3.76% | $27.9 | $19.98 | 0.89% |
| Skyworks Solutions Inc | 18.09 | 2.21 | 3.23 | 1.9% | $0.25 | $0.36 | -15.47% |
| Universal Display Corp | 36.21 | 5.39 | 13.35 | 3.47% | $0.07 | $0.12 | 8.15% |
| MACOM Technology Solutions Holdings Inc | 113.54 | 7.51 | 12.06 | 1.88% | $0.04 | $0.1 | 28.25% |
| Lattice Semiconductor Corp | 37.25 | 9.99 | 11.22 | 3.28% | $0.04 | $0.08 | -34.72% |
| Average | 62.33 | 8.96 | 10.68 | 4.86% | $23.9 | $27.89 | 12.47% |
When analyzing Advanced Micro Devices, the following trends become evident:
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Notably, the current Price to Earnings ratio for this stock, 127.5, is 2.05x above the industry norm, reflecting a higher valuation relative to the industry.
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With a Price to Book ratio of 4.1, significantly falling below the industry average by 0.46x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio is 9.69, which is 0.91x the industry average. This suggests a possible undervaluation based on sales performance.
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The Return on Equity (ROE) of 1.36% is 3.5% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.55 Billion, which is 0.06x below the industry average. This potentially indicates lower profitability or financial challenges.
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With lower gross profit of $3.42 Billion, which indicates 0.12x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company is experiencing remarkable revenue growth, with a rate of 17.57%, outperforming the industry average of 12.47%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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 considering the Debt-to-Equity ratio, Advanced Micro Devices can be compared to its top 4 peers, leading to the following observations:
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Advanced Micro Devices has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.04.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator 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, and gross profit, Advanced Micro Devices lags behind peers, indicating lower profitability and operational efficiency. However, the high revenue growth rate sets Advanced Micro Devices apart from its industry counterparts, showing strong potential for future growth and market expansion.
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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