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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 (NASDAQ: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 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 | 221.97 | 4.41 | 10.96 | 0.22% | $0.9 | $2.56 | -11.27% |
| NVIDIA Corp | 76.58 | 53.14 | 37.40 | 32.23% | $14.56 | $16.79 | 265.28% |
| Broadcom Inc | 51.28 | 9.10 | 15.50 | 2.81% | $4.61 | $7.38 | 34.17% |
| Qualcomm Inc | 25.20 | 8.62 | 5.85 | 9.79% | $3.08 | $5.28 | 1.23% |
| Texas Instruments Inc | 29.77 | 10.25 | 10.42 | 6.52% | $1.77 | $2.1 | -16.4% |
| Intel Corp | 32.01 | 1.25 | 2.38 | -0.36% | $1.83 | $5.22 | -17.41% |
| ARM Holdings PLC | 402.24 | 22.92 | 37.69 | 4.35% | $0.06 | $0.89 | 12.62% |
| Analog Devices Inc | 37.85 | 2.96 | 9.21 | 1.3% | $1.12 | $1.47 | -22.68% |
| Microchip Technology Inc | 26.97 | 7.62 | 6.74 | 2.25% | $0.39 | $0.79 | -24.91% |
| STMicroelectronics NV | 10.73 | 2.20 | 2.39 | 3.04% | $1.06 | $1.44 | -18.41% |
| Monolithic Power Systems Inc | 85.07 | 16.44 | 19.07 | 4.45% | $0.1 | $0.25 | 1.51% |
| ON Semiconductor Corp | 14.90 | 3.87 | 3.97 | 5.7% | $0.71 | $0.85 | -4.95% |
| GLOBALFOUNDRIES Inc | 33.78 | 2.69 | 4.27 | 1.19% | $0.54 | $0.39 | -15.86% |
| ASE Technology Holding Co Ltd | 21.22 | 2.53 | 1.27 | 1.94% | $23.55 | $20.87 | 1.46% |
| United Microelectronics Corp | 12.21 | 1.77 | 2.96 | 3.43% | $23.32 | $17.81 | -18.98% |
| First Solar Inc | 19.60 | 2.90 | 5.64 | 5.38% | $0.36 | $0.35 | 15.58% |
| Skyworks Solutions Inc | 17.78 | 2.38 | 3.35 | 2.91% | $0.31 | $0.42 | -9.29% |
| Lattice Semiconductor Corp | 45.81 | 14.40 | 14.37 | 2.15% | $0.03 | $0.1 | -23.6% |
| Universal Display Corp | 38.03 | 5.59 | 13.63 | 3.86% | $0.07 | $0.13 | 26.67% |
| MACOM Technology Solutions Holdings Inc | 115.60 | 7.09 | 11.66 | 1.45% | $0.04 | $0.1 | 6.98% |
| Rambus Inc | 17.71 | 6.32 | 13.81 | 3.24% | $0.05 | $0.09 | 3.61% |
| Average | 55.72 | 9.2 | 11.08 | 4.88% | $3.88 | $4.14 | 9.83% |
After a detailed analysis of Advanced Micro Devices, the following trends become apparent:
At 221.97, the stock's Price to Earnings ratio significantly exceeds the industry average by 3.98x, suggesting a premium valuation relative to industry peers.
With a Price to Book ratio of 4.41, significantly falling below the industry average by 0.48x, it suggests undervaluation and the possibility of untapped growth prospects.
With a relatively low Price to Sales ratio of 10.96, which is 0.99x the industry average, the stock might be considered undervalued based on sales performance.
The Return on Equity (ROE) of 0.22% is 4.66% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $900 Million, which is 0.23x below the industry average, the company may face lower profitability or financial challenges.
Compared to its industry, the company has lower gross profit of $2.56 Billion, which indicates 0.62x below the industry average, potentially indicating lower revenue after accounting for production costs.
The company is witnessing a substantial decline in revenue growth, with a rate of -11.27% compared to the industry average of 9.83%, which indicates a challenging sales environment.
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared 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 assessing Advanced Micro Devices against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
Advanced Micro Devices is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.05.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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 standards. In terms of ROE, EBITDA, gross profit, and revenue growth, Advanced Micro Devices lags behind its competitors, indicating weaker financial performance within the Semiconductors & Semiconductor Equipment industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: AMD
