In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Advanced Micro Devices AMD in comparison to its major competitors within the Semiconductors & Semiconductor Equipment industry. By analyzing crucial 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 | 260.62 | 5.17 | 12.87 | 0.22% | $0.9 | $2.56 | 2.24% |
| NVIDIA Corp | 75.16 | 64.29 | 40.15 | 32.31% | $17.75 | $20.41 | 262.12% |
| Taiwan Semiconductor Manufacturing Co Ltd | 35.77 | 8.56 | 13.86 | 6.38% | $428.26 | $314.51 | 16.52% |
| Broadcom Inc | 73.86 | 11.41 | 18.08 | 3.02% | $5.58 | $7.78 | 42.99% |
| Qualcomm Inc | 27.76 | 9.49 | 6.44 | 9.79% | $3.08 | $5.28 | 1.23% |
| ARM Holdings PLC | 612.14 | 35.13 | 57.35 | 4.35% | $0.06 | $0.89 | 46.6% |
| Texas Instruments Inc | 31.43 | 10.82 | 11 | 6.52% | $1.77 | $2.1 | -16.4% |
| Intel Corp | 35.53 | 1.38 | 2.64 | -0.36% | $2.09 | $5.22 | 8.61% |
| Analog Devices Inc | 55.53 | 3.35 | 11.36 | 0.85% | $0.93 | $1.18 | -33.83% |
| Microchip Technology Inc | 26.46 | 7.42 | 6.61 | 2.25% | $0.47 | $0.79 | -40.62% |
| Monolithic Power Systems Inc | 103.80 | 20.06 | 23.27 | 4.45% | $0.1 | $0.25 | 1.51% |
| STMicroelectronics NV | 10.80 | 2.23 | 2.41 | 3.04% | $1.06 | $1.44 | -18.41% |
| ON Semiconductor Corp | 15.59 | 4.04 | 4.16 | 5.7% | $0.71 | $0.85 | -4.95% |
| GLOBALFOUNDRIES Inc | 34 | 2.68 | 4.29 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 23.75 | 2.83 | 1.42 | 1.94% | $23.55 | $20.87 | 1.46% |
| First Solar Inc | 22.37 | 3.31 | 6.43 | 3.48% | $0.36 | $0.35 | 44.83% |
| United Microelectronics Corp | 12.15 | 1.76 | 2.95 | 2.9% | $24.0 | $16.9 | 0.78% |
| Skyworks Solutions Inc | 21.82 | 2.92 | 4.11 | 2.91% | $0.31 | $0.42 | -9.29% |
| Universal Display Corp | 50.05 | 7.36 | 17.94 | 3.86% | $0.07 | $0.13 | 26.67% |
| Lattice Semiconductor Corp | 38.35 | 12.05 | 12.03 | 2.15% | $0.03 | $0.1 | -23.6% |
| MACOM Technology Solutions Holdings Inc | 127.70 | 7.84 | 12.88 | 1.45% | $0.04 | $0.1 | 6.98% |
| Cirrus Logic Inc | 28.53 | 4.11 | 4.38 | 2.48% | $0.07 | $0.19 | -0.27% |
| Average | 69.65 | 10.62 | 12.56 | 4.79% | $24.33 | $19.05 | 14.15% |
When analyzing Advanced Micro Devices, the following trends become evident:
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At 260.62, the stock's Price to Earnings ratio significantly exceeds the industry average by 3.74x, suggesting a premium valuation relative to industry peers.
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With a Price to Book ratio of 5.17, 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 of 12.87, which is 1.02x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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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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The gross profit of $2.56 Billion is 0.13x below that of its industry, suggesting potential lower revenue after accounting for production costs.
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The company's revenue growth of 2.24% is significantly below the industry average of 14.15%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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 evaluating Advanced Micro Devices alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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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 0.05.
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 high, signaling rich valuation relative to sales. In terms of ROE, EBITDA, gross profit, and revenue growth, Advanced Micro Devices lags behind industry peers, indicating weaker financial performance.
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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