In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Advanced Micro Devices AMD alongside its primary competitors in the Semiconductors & Semiconductor Equipment industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to 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 | 231.35 | 4.59 | 11.43 | 0.22% | $0.9 | $2.56 | 2.24% |
| NVIDIA Corp | 77.17 | 66.01 | 41.23 | 32.31% | $17.75 | $20.41 | 262.12% |
| Taiwan Semiconductor Manufacturing Co Ltd | 33.13 | 7.93 | 12.84 | 6.38% | $428.26 | $314.51 | 16.52% |
| Broadcom Inc | 74.75 | 11.54 | 18.30 | 3.02% | $5.58 | $7.78 | 42.99% |
| Qualcomm Inc | 28.71 | 9.82 | 6.67 | 9.79% | $3.08 | $5.28 | 1.23% |
| Texas Instruments Inc | 30.20 | 10.40 | 10.57 | 6.52% | $1.77 | $2.1 | -16.4% |
| ARM Holdings PLC | 544.45 | 31.25 | 51.01 | 4.35% | $0.06 | $0.89 | 46.6% |
| Intel Corp | 31.39 | 1.22 | 2.33 | -0.36% | $2.09 | $5.22 | 8.61% |
| Analog Devices Inc | 54.02 | 3.25 | 11.05 | 0.85% | $0.93 | $1.18 | -33.83% |
| Microchip Technology Inc | 26.25 | 7.37 | 6.56 | 2.25% | $0.47 | $0.79 | -40.62% |
| Monolithic Power Systems Inc | 96.13 | 18.57 | 21.55 | 4.45% | $0.1 | $0.25 | 1.51% |
| STMicroelectronics NV | 10.89 | 2.25 | 2.43 | 3.04% | $1.06 | $1.44 | -18.41% |
| ON Semiconductor Corp | 14.69 | 3.81 | 3.92 | 5.7% | $0.71 | $0.85 | -4.95% |
| First Solar Inc | 28.68 | 4.24 | 8.25 | 3.48% | $0.36 | $0.35 | 44.83% |
| GLOBALFOUNDRIES Inc | 30.90 | 2.44 | 3.90 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 22.69 | 2.70 | 1.36 | 1.94% | $23.55 | $20.87 | 1.46% |
| United Microelectronics Corp | 12.88 | 1.87 | 3.12 | 2.9% | $24.0 | $16.9 | 0.78% |
| Skyworks Solutions Inc | 19.66 | 2.63 | 3.70 | 2.91% | $0.31 | $0.42 | -9.29% |
| Universal Display Corp | 43.78 | 6.43 | 15.70 | 3.86% | $0.07 | $0.13 | 26.67% |
| Lattice Semiconductor Corp | 38.60 | 12.13 | 12.11 | 2.15% | $0.03 | $0.1 | -23.6% |
| MACOM Technology Solutions Holdings Inc | 117.12 | 7.19 | 11.81 | 1.45% | $0.04 | $0.1 | 6.98% |
| Cirrus Logic Inc | 25.01 | 3.61 | 3.84 | 2.48% | $0.05 | $0.19 | -39.93% |
| Average | 64.81 | 10.32 | 12.01 | 4.79% | $24.32 | $19.05 | 12.26% |
Upon closer analysis of Advanced Micro Devices, the following trends become apparent:
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Notably, the current Price to Earnings ratio for this stock, 231.35, is 3.57x above the industry norm, reflecting a higher valuation relative to the industry.
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Considering a Price to Book ratio of 4.59, which is well below the industry average by 0.44x, the stock may be undervalued based on its book value compared to its peers.
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With a relatively low Price to Sales ratio of 11.43, which is 0.95x the industry average, the stock might be considered undervalued based on sales performance.
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The Return on Equity (ROE) of 0.22% is 4.57% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $900 Million, which is 0.04x below the industry average, the company may face lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $2.56 Billion, which indicates 0.13x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company's revenue growth of 2.24% is significantly lower compared to the industry average of 12.26%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage 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.
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 exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.05.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.
Key Takeaways
For Advanced Micro Devices, the PE ratio is high compared to peers, indicating potentially overvalued stock. The PB ratio is low, suggesting undervaluation based on assets. The PS ratio is also low, indicating potential undervaluation based on sales. In terms of ROE, EBITDA, gross profit, and revenue growth, Advanced Micro Devices lags behind its industry peers, signaling weaker financial performance overall.
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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