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 not overvalued while it is showing excellent growth. This is an interesting combination. This makes AMD very considerable 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.
Each year in the past 5 years AMD had a positive operating cash flow.

1.2 Ratios

AMD has a better Return On Assets (4.30%) than 66.37% of its industry peers.
AMD's Return On Equity of 5.44% is fine compared to the rest of the industry. AMD outperforms 60.18% of its industry peers.
AMD has a Return On Invested Capital of 3.71%. This is comparable to the rest of the industry: AMD outperforms 58.41% of its industry peers.
AMD had an Average Return On Invested Capital over the past 3 years of 1.56%. This is significantly below the industry average of 10.66%.
The last Return On Invested Capital (3.71%) for AMD is above the 3 year average (1.56%), which is a sign of increasing profitability.

		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

The Profit Margin of AMD (10.32%) is better than 66.37% of its industry peers.
AMD's Profit Margin has improved in the last couple of years.
The Operating Margin of AMD (9.33%) is better than 61.06% of its industry peers.
In the last couple of years the Operating Margin of AMD has remained more or less at the same level.
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
AMD has more shares outstanding than it did 5 years ago.
The debt/assets ratio for AMD has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 15.24 indicates that AMD is not in any danger for bankruptcy at the moment.
AMD has a better Altman-Z score (15.24) than 82.30% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 0.59, AMD is in the better half of 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	15.24

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.
AMD's Current ratio of 2.31 is on the low side compared to the rest of the industry. AMD is outperformed by 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.
AMD's Quick ratio of 1.68 is on the low side compared to the rest of the industry. AMD is outperformed by 66.37% of its industry peers.

		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

The Earnings Per Share has grown by an impressive 24.33% over the past year.
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!
Measured over the past years, AMD shows a very strong growth in Revenue. The Revenue has been growing by 30.81% on average per year.

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

The Earnings Per Share is expected to grow by 40.31% on average over the next years. This is a very strong growth
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 66.02.
Compared to the rest of the industry, the Price/Earnings ratio of AMD is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.41. AMD is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 37.12 indicates a quite expensive valuation of AMD.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AMD indicates a somewhat cheap valuation: AMD is cheaper than 61.06% of the companies listed in the same industry.
AMD's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 25.64.

		Industry Rank	Sector Rank
PE	66.02
Fwd PE	37.12

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as AMD.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AMD indicates a somewhat cheap valuation: AMD is cheaper than 61.06% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	73.59
EV/EBITDA	63.2

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.
AMD's earnings are expected to grow with 46.55% in the coming years. This may justify a more expensive valuation.