We assign a fundamental rating of 6 out of 10 to AMD. AMD was compared to 113 industry peers in the Semiconductors & Semiconductor Equipment industry. While AMD belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. AMD is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! With these ratings, AMD could be worth investigating further for growth investing!.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year AMD was profitable.
AMD had a positive operating cash flow in the past year.
Each year in the past 5 years AMD has been profitable.
AMD had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

AMD has a better Return On Assets (4.30%) than 66.37% of its industry peers.
AMD has a Return On Equity of 5.44%. This is in the better half of the industry: AMD outperforms 60.18% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.71%, AMD is in line with its industry, outperforming 58.41% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AMD is significantly below the industry average of 10.85%.
The 3 year average ROIC (1.56%) for AMD is below the current ROIC(3.71%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	4.3%
ROE	5.44%
ROIC	3.71%

ROA(3y)1.86%

ROA(5y)11.77%

ROE(3y)2.26%

ROE(5y)18.33%

ROIC(3y)1.56%

ROIC(5y)11.51%

1.3 Margins

AMD's Profit Margin of 10.32% is fine compared to the rest of the industry. AMD outperforms 66.37% of its industry peers.
AMD's Profit Margin has improved in the last couple of years.
AMD has a Operating Margin of 9.33%. This is in the better half of the industry: AMD outperforms 61.06% of its industry peers.
AMD's Operating Margin has been stable in the last couple of years.
AMD has a Gross Margin of 48.26%. This is comparable to the rest of the industry: AMD outperforms 58.41% of its industry peers.
In the last couple of years the Gross Margin of AMD has grown nicely.

		Industry Rank	Sector Rank
OM	9.33%
PM (TTM)	10.32%
GM	48.26%

OM growth 3Y-29.04%

OM growth 5Y-1.4%

PM growth 3Y-30.84%

PM growth 5Y4.67%

GM growth 3Y0.76%

GM growth 5Y2.98%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

AMD has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, AMD has more shares outstanding
The number of shares outstanding for AMD has been increased compared to 5 years ago.
Compared to 1 year ago, AMD has an improved debt to assets ratio.

2.2 Solvency

AMD has an Altman-Z score of 16.18. This indicates that AMD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 16.18, AMD belongs to the top of the industry, outperforming 82.30% of the companies in the same industry.
AMD has a debt to FCF ratio of 0.59. This is a very positive value and a sign of high solvency as it would only need 0.59 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 0.59, AMD is doing good in the industry, outperforming 79.65% of the companies in the same industry.
A Debt/Equity ratio of 0.04 indicates that AMD is not too dependend on debt financing.
The Debt to Equity ratio of AMD (0.04) is better than 64.60% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.04
Debt/FCF	0.59
Altman-Z	16.18

ROIC/WACC0.34

WACC10.94%

2.3 Liquidity

AMD has a Current Ratio of 2.31. This indicates that AMD is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of AMD (2.31) is worse than 65.49% of its industry peers.
AMD has a Quick Ratio of 1.68. This is a normal value and indicates that AMD is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.68, AMD is not doing good in the industry: 66.37% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Current Ratio	2.31
Quick Ratio	1.68

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

AMD shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.33%, which is quite impressive.
AMD shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 38.99% yearly.
The Revenue has grown by 31.83% in the past year. This is a very strong growth!
AMD shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 30.81% yearly.

EPS 1Y (TTM)24.33%

EPS 3Y5.84%

EPS 5Y38.99%

EPS Q2Q%30.43%

Revenue 1Y (TTM)31.83%

Revenue growth 3Y16.2%

Revenue growth 5Y30.81%

Sales Q2Q%35.59%

3.2 Future

AMD is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 40.31% yearly.
Based on estimates for the next years, AMD will show a very strong growth in Revenue. The Revenue will grow by 34.18% on average per year.

EPS Next Y21.25%

EPS Next 2Y41.36%

EPS Next 3Y46.55%

EPS Next 5Y40.31%

Revenue Next Year32.85%

Revenue Next 2Y32.51%

Revenue Next 3Y35.01%

Revenue Next 5Y34.18%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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4. Valuation

4.1 Price/Earnings Ratio

AMD is valuated quite expensively with a Price/Earnings ratio of 63.47.
The rest of the industry has a similar Price/Earnings ratio as AMD.
When comparing the Price/Earnings ratio of AMD to the average of the S&P500 Index (28.30), we can say AMD is valued expensively.
Based on the Price/Forward Earnings ratio of 35.68, the valuation of AMD can be described as expensive.
60.18% of the companies in the same industry are more expensive than AMD, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of AMD to the average of the S&P500 Index (25.57), we can say AMD is valued slightly more expensively.

		Industry Rank	Sector Rank
PE	63.47
Fwd PE	35.68

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AMD is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AMD indicates a somewhat cheap valuation: AMD is cheaper than 61.95% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	70.74
EV/EBITDA	67.4

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of AMD may justify a higher PE ratio.
A more expensive valuation may be justified as AMD's earnings are expected to grow with 46.55% in the coming years.