Yahoo Finance Is Advanced Micro Devices, Inc. (NASDAQ:AMD) Potentially Undervalued?
Today we're going to take a look at the well-established Advanced Micro Devices, Inc. (NASDAQ:AMD). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$211 at one point, and dropping to the lows of US$144. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Advanced Micro Devices' current trading price of US$153 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Advanced Micro Devices’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Advanced Micro Devices
What's The Opportunity In Advanced Micro Devices?
According to our valuation model, the stock is currently overvalued by about 35%, trading at US$153 compared to our intrinsic value of $113.54. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Advanced Micro Devices’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Advanced Micro Devices look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Advanced Micro Devices' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in AMD’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe AMD should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on AMD for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for AMD, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you'd like to know more about Advanced Micro Devices as a business, it's important to be aware of any risks it's facing. For example - Advanced Micro Devices has 1 warning sign we think you should be aware of.
If you are no longer interested in Advanced Micro Devices, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
