Advanced Micro Devices Inc (AMD) Stock Analysis and Metrics

Sector: Technology Industry: Semiconductors CIK: 0000002488

P/B 5.65

P/E 103.83

P/S 10.72

Market Cap 343.27 Bn

ROIC (Qtr) 3.91

Div Yield % 0.00

Rev 1y % (Qtr) 35.59

Total Debt (Qtr) 3.87 Bn

Debt/Equity (Qtr) 0.06

About

Advanced Micro Devices, Inc., better known as AMD, is a prominent player in the technology industry, specializing in the design, manufacture, and sale of a diverse range of semiconductor products. AMD's offerings include microprocessors, graphics processing units (GPUs), accelerated processing units (APUs), field programmable gate arrays (FPGAs), and system-on-chip (SoC) products. Its ticker symbol is AMD. AMD's main business activities encompass the creation of a wide array of semiconductor products. These products are used in various applications,...

Advanced Micro Devices, Inc., better known as AMD, is a prominent player in the technology industry, specializing in the design, manufacture, and sale of a diverse range of semiconductor products. AMD's offerings include microprocessors, graphics processing units (GPUs), accelerated processing units (APUs), field programmable gate arrays (FPGAs), and system-on-chip (SoC) products. Its ticker symbol is AMD.

AMD's main business activities encompass the creation of a wide array of semiconductor products. These products are used in various applications, such as desktop and notebook PCs, servers, data centers, gaming consoles, and embedded systems. AMD's global reach extends across numerous countries and regions, making it a truly international entity.

The company's revenue is primarily generated through the sale of its products to original equipment manufacturers (OEMs), original design manufacturers (ODMs), and other customers. AMD's primary products include server microprocessors, graphics processing units, accelerated processing units, data processing units, FPGAs, Smart Network Interface Cards (SmartNICs), AI accelerators, and Adaptive SoC products.

In the competitive landscape, AMD holds a strong position due to its diverse product range and significant presence in the data center, client, gaming, and embedded markets. Its key competitors include Intel, NVIDIA, and ARM Holdings. AMD's competitive advantages include its high-performance products, energy-efficient designs, and robust relationships with OEMs and ODMs.

AMD's customer base includes a variety of companies, ranging from OEMs and ODMs to other semiconductor companies. Its products are utilized in a wide range of applications, including desktop and notebook PCs, servers, data centers, gaming consoles, and embedded systems.

AMD's product portfolio includes a multitude of brand names and trade names. In the Data Center segment, the company offers server CPUs under the AMD EPYC brand, including the EPYC 9004 Series, EPYC 8004 Series, EPYC 7003 Series, and EPYC 7002 Series. The Data Center segment also includes data center GPUs under the AMD Instinct brand, specifically the MI200 and MI300 Series, which are based on AMD CDNA architecture.

The Client segment includes CPUs, APUs, and chipsets for desktop, notebook, and handheld personal computers. This segment offers desktop CPUs under the AMD Ryzen and AMD Athlon brands, including the Ryzen 7000 Series and Ryzen 5000 Series. The Client segment also includes notebook CPUs under the AMD Ryzen and AMD Athlon mobile brands, such as the Ryzen 7045 Series and Ryzen 7040 Series.

The Gaming segment primarily includes graphics processing units (GPUs) and semi-custom products for gaming consoles and handheld PCs. This segment offers discrete GPUs under the AMD Radeon brand, which are designed for desktop and notebook PCs. The Gaming segment also includes semi-custom products, such as those used in the Sony PlayStation 5 and Microsoft Xbox Series S and X game consoles.

The Embedded segment includes embedded CPUs, GPUs, APUs, FPGAs, and Adaptive SoC products. This segment offers embedded CPUs under the AMD EPYC Embedded, AMD Ryzen Embedded V-Series, AMD Ryzen Embedded R-Series, and other brands.

Stock Price Chart

Analysis

Pros

Strong operating cash flow of 6.41B provides robust 1.66x coverage of total debt 3.87B, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 4.81B provide 5.51x coverage of short-term debt 873M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 34.56B provides 8.93x coverage of total debt 3.87B, indicating robust asset backing and low credit risk.
Operating cash flow of 6.41B provides exceptional 56.21x coverage of interest expenses 114M, showing strong debt service capability.
Strong operating cash flow of 6.41B provides 1.71x coverage of SG&A expenses 3.74B, showing efficient operational cost management.

Cons

Operating cash flow of 6.41B barely covers its investment activities of (5.21B), with a coverage ratio of -1.23, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (5.21B) provide weak support for R&D spending of 7.47B, which is -0.70x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Cash reserves of 4.81B provide limited coverage of acquisition spending of (1.82B), which is -2.65x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
The company's operating cash flow of 6.41B shows concerning coverage of stock compensation expenses of 1.49B, with a 4.30 ratio indicating potential earnings quality issues.
Operating cash flow of 6.41B provides minimal -46.10x coverage of tax expenses of (139M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer Comparison

Companies in the Semiconductors

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	NVDA	Nvidia Corp	4,276.26 Bn	43.11	22.85	10.48 Bn
2	AVGO	Broadcom Inc.	1,690.87 Bn	89.31	28.22	64.23 Bn
3	TSM	Taiwan Semiconductor Manufacturing Co Ltd	1,514.32 Bn	29.36	12.71	31.18 Bn
4	AMD	Advanced Micro Devices Inc	343.27 Bn	103.83	10.72	3.87 Bn
5	MU	Micron Technology Inc	269.16 Bn	31.52	7.20	15.28 Bn
6	INTC	Intel Corp	249.55 Bn	1,260.33	4.67	46.55 Bn
7	QCOM	Qualcomm Inc/De	195.62 Bn	35.30	4.42	14.81 Bn
8	TXN	Texas Instruments Inc	163.92 Bn	32.50	9.49	14.05 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	4.46	3.95
EV to Cash from Ops.	53.48	-331.60
EV to Debt	88.56	86.14
EV to EBIT	104.45	-55.96
EV to EBITDA	58.56	20.88
EV to Free Cash Flow [EV/FCF]	62.91	-4.09
EV to Market Cap	1.00	0.80
EV to Revenue	10.70	18.79
Price to Book Value [P/B]	5.65	5.23
Price to Earnings [P/E]	103.83	12.47

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	2.29
Dividend Payout Ratio %	0.00	8.00
Dividend per Basic Share	0.00	0.62
FCF Dividend Payout Ratio %	0.00	10.38
Interest Coverage	28.78	8.19

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-69.31	-155.77
Cash and Equivalents Growth (1y) %	23.38	44.44
Dividend Growth (1y) %	0.00	5.30
EBIAT Growth (1y) %	75.78	34.22
EBITDA Growth (1y) %	29.93	47.50
EBIT Growth (1y) %	106.22	30.14
EBT Growth (1y) %	112.41	47.04
EPS Growth (1y) %	79.65	36.18
FCF Growth (1y) %	250.13	252.76
Gross Profit Growth (1y) %	31.50	43.92

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.42	0.49
Cash Payout Ratio	0.00	0.09
Cash Ratio	0.41	2.23
Current Ratio	2.31	5.43
Debt to Equity Ratio	0.06	0.34
Interest Cover Ratio	28.78	8.19
Times Interest Earned	28.78	8.19

Profitability

Metric	Value	Industry
EBITDA Margin %	19.70	-112.44
EBIT Margin %	10.24	-92.10
EBT Margin %	9.89	-132.39
Gross Margin %	48.30	47.63
Net Profit Margin %	10.30	-133.41

Advanced Micro Devices Inc (NASDAQ: AMD)