Advanced Micro Devices Inc (NASDAQ: AMD)

Sector: Technology Industry: Semiconductors CIK: 0000002488
Market Cap 333.34 Bn
P/B 5.48
P/E 100.83
P/S 10.41
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,...

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Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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.

Geographical Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,521.08 Bn 45.58 24.16 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,648.98 Bn 31.97 13.84 31.18 Bn
3 AVGO Broadcom Inc. 1,565.97 Bn 67.71 24.51 65.14 Bn
4 MU Micron Technology Inc 366.37 Bn 30.76 8.66 12.43 Bn
5 AMD Advanced Micro Devices Inc 333.34 Bn 100.83 10.41 3.87 Bn
6 INTC Intel Corp 271.33 Bn 1,370.33 5.08 46.55 Bn
7 QCOM Qualcomm Inc/De 199.55 Bn 36.01 4.51 14.81 Bn
8 TXN Texas Instruments Inc 172.17 Bn 34.14 9.97 14.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.33 4.13
EV to Cash from Ops. EV/CFO 51.93 -370.81
EV to Debt EV to Debt 85.99 88.27
EV to EBIT EV/EBIT 101.43 -65.23
EV to EBITDA EV/EBITDA 56.87 22.97
EV to Free Cash Flow [EV/FCF] EV/FCF 61.08 -8.14
EV to Market Cap EV to Market Cap 1.00 0.80
EV to Revenue EV/Rev 10.39 20.31
Price to Book Value [P/B] P/B 5.48 5.16
Price to Earnings [P/E] P/E 100.83 9.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 2.39
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 8.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 9.91
Interest Coverage Int. cover (Qtr) 28.78 8.38
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -69.31 -155.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 23.38 45.60
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.64
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 75.78 26.23
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 29.93 47.12
EBIT Growth (1y) % EBIT 1y % (Qtr) 106.22 25.83
EBT Growth (1y) % EBT 1y % (Qtr) 112.41 39.93
EPS Growth (1y) % EPS 1y % (Qtr) 79.65 24.64
FCF Growth (1y) % FCF 1y % (Qtr) 250.13 244.42
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 31.50 43.10
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.42 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 0.41 2.23
Current Ratio Curr Ratio (Qtr) 2.31 5.43
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.34
Interest Cover Ratio Int Coverage (Qtr) 28.78 8.38
Times Interest Earned Times Interest Earned (Qtr) 28.78 8.38
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 19.70 -112.38
EBIT Margin % EBIT Margin % (Qtr) 10.24 -91.98
EBT Margin % EBT Margin % (Qtr) 9.89 -132.25
Gross Margin % Gross Margin % (Qtr) 48.30 47.73
Net Profit Margin % Net Margin % (Qtr) 10.30 -133.26