Stock gained 5.5% on May 2
Semiconductor (SMH) company Advanced Micro Devices (AMD) rose 5.5% on May 2 to close trading at $28.29. The stock is currently trading 160% above its 52-week low of $10.87 and 17% below its 52-week high of $34.14.
AMD stock soared as much as 8% in the after-hours trading session on April 30 after the company’s first-quarter earnings and guidance beat estimates. The stock rose after AMD’s CEO Lisa Su provided an update on the launch of the company’s 7-nm products.
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AMD confirmed that it would ship 7-nm products in the second quarter, which could help AMD gain double-digit market share in the server CPU space by 2019.
AMD’s first-quarter sales fell 23%
AMD’s first-quarter revenue fell 23% year-over-year to $1.27 billion. However, the company’s second-quarter guidance beat analysts’ estimates comfortably. In comparison, peer company Intel (INTC) reported weaker-than-expected guidance for the second quarter. AMD expects sales to rise by 8% in 2019, while Intel expects sales to fall by 2.5% this year. AMD stock has had a stellar run in 2019 with gains of over 53%. But does it have more upside potential?
AMD’s stock price rise means that the stock is trading just 3.5% below analysts’ 12-month target estimates of $29.27. Out of 31 analysts covering AMD, 11 have a “buy” recommendation and 15 have a “hold” recommendation for the stock. There are five “sell” recommendations.
AMD has a forward PE multiple of 28.58x. In comparison, EPS are estimated to grow by 41.3%, indicating that the stock is undervalued by at least 40% considering the PE multiple.
AMD’s stock has risen by a staggering 612% over the last five years. Its EPS rose at a CAGR (compound annual growth rate) of 32.5% in the last five years. Analysts expect the company’s earnings to rise by 35% in the next five years.