Advanced Micro Devices Inc (AMD, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $108.32, Advanced Micro Devices Inc has witnessed a surge of 2.52% over a period, marked against a three-month change of 0.39%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Advanced Micro Devices Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Advanced Micro Devices Inc has been assigned the following ranks:
- 1. Financial strength rank: 8/10
- 2. Profitability rank: 7/10
- 3. Growth rank: 10/10
- 4. GF Value rank: 6/10
- 5. Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high growth rank and a strong momentum rank, GuruFocus assigned Advanced Micro Devices Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Company Overview
Advanced Micro Devices Inc, with a market cap of $175.01 billion, designs microprocessors for the computer and consumer electronics industries. The majority of its sales, which total $21.88 billion, are in the personal computer and data center markets via CPUs and GPUs. Additionally, the firm supplies the chips found in prominent game consoles such as the Sony PlayStation and Microsoft Xbox. AMD acquired graphics processor and chipset maker ATI in 2006 in an effort to improve its positioning in the PC food chain. In 2009, the firm spun out its manufacturing operations to form the foundry GlobalFoundries. In 2022, the firm acquired field-programmable gate array leader Xilinx to diversify its business and augment its opportunities in key end markets such as the data center and automotive.
Financial Strength Analysis
According to the Financial Strength rating, Advanced Micro Devices Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 8.45, Advanced Micro Devices Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.13, Advanced Micro Devices Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Advanced Micro Devices Inc's impressive standing among its peers in generating profit. Furthermore, Advanced Micro Devices Inc's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 37.79; 2019: 42.61; 2020: 44.53; 2021: 48.25; 2022: 44.93. This trend underscores the company's growing proficiency in transforming revenue into profit.
Growth Rank Breakdown
Ranked highly in Growth, Advanced Micro Devices Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 35.7%, which outperforms better than 89.02% of 865 companies in the Semiconductors industry. Moreover, Advanced Micro Devices Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 76, and the rate over the past five years is 71.1. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given Advanced Micro Devices Inc's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. This analysis suggests that Advanced Micro Devices Inc is a promising investment opportunity for value investors seeking robust growth and financial stability.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen