Advanced Micro Devices Inc. (AMD:NSD) Stock could hit $31 on historical technical pattern

STA Research
by: STA Research

CEO of STA Research(stocktargetadvisor.com) Don Lawrence, (Financial Analyst and Veteran Trader) explains in the video below that he believes that while the fundamentals are positive on AMD’s stock, computer demand destruction(due to the economy) and the historical technical pattern is weighing on the stock, and will continue to weigh in on the stock’s trading price as it continues to break support levels.  AMD just broke support at $75, next support is $52, $42,  then $30. The stock is currently caught in a long term historical trend, which generally sees the stock rise 5-8 times, then re-traces all of it’s gains.

Caution on the stock is required, but will eventually become a fantastic valuation play once the downward trend dissipates.

STA Research currently assigned the stock with a Underperform rating.

 

Our Fundamental Analysis:

Based on the Advanced Micro Devices Inc stock forecasts from 25 analysts, the average analyst target price for Advanced Micro Devices Inc is USD 111.98 over the next 12 months. Advanced Micro Devices Inc’s average analyst rating is Buy .At the last closing, Advanced Micro Devices Inc’s stock price was USD 69.50Advanced Micro Devices Inc’s stock price has changed by -9.34% over the past week, -25.14% over the past month and -33.42% over the last year.

 

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior risk adjusted returns

This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Superior capital utilization

The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Low debt

The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth

This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

Superior Revenue Growth

This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

High Gross Profit to Asset Ratio

This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

What we don’t like:

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Overpriced on free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

 

Watch our full video from our CEO to get the full analysis on the stock:

 

 

Disclaimer

Stock Target Advisor is not a broker/dealer, investment advisor, or platform for making stock buying or selling decisions. Our goal is to democratize and simplify financial information through automated analysis, aggregation of stock information, and education to help investors with their research. No content on our site, blogs or newsletters constitutes – or should be understood as constituting – a recommendation to enter into any securities transactions or to engage in any of the investment strategies presented in our site content. We also cannot guarantee the accuracy of any information presented on our site and in our analysis.

Leave a Reply

Your email address will not be published.