Sign InAMD's Stock Evaluation: Mixed Signals Point to Hold as Earnings Announcement Looms
Summary
As of October 30, 2023, AMD's stock is classified as a Hold based on fundamental and technical analysis, with experts predicting positive returns in the short term but caution advised due to negative EPS and PE and trading below moving averages, making the upcoming earnings announcement a key factor for potential clarity and confirmation.
Fundamental Analysis
Advanced Micro Devices, Inc. (AMD) is a company traded on NASDAQ with a market capitalization of $155.40 billion. The tech firm's performance amidst a prospering Nasdaq index in 2023 suggests its potential to deliver strong returns. There have been anticipations heightening ahead of AMD's earnings announcement scheduled for October 31, 2023, with the consensus forecasting adjusted earnings per share of 68 cents and quarterly revenue of $5.7 billion.
AMD's trailing EPS stands at -0.04, translating to a negative Price-to-Earnings (PE) ratio of -2404.5. A negative PE often signifies that the firm is not making profits, a factor that investors should consider cautiously. AMD's range in stock price over the year has been quite wide, from a low of $58.03 to a high of $132.83.
As per the expert ratings, AMD's stock has a consensus rating of "Buy", with 24 experts recommending "Buy", one recommending "Strong Buy", and three recommending "Hold". No experts suggested "Sell" or "Strong Sell". Additionally, the median target price from these experts is $110, with a consensus target of $121.26, indicating a positive uplift potential from the last closing price.
Technical Analysis
The technical indicators offer a slightly more bearish view than the fundamentals. With the last close at $96.18 on October 30, 2023, AMD has been trading below both its 50-day and 200-day moving average prices, which stand at $103.55 and $99.67 respectively. Moreover, the Relative Strength Index (RSI14) of 25 implies that the stock may be oversold, sometimes suggesting a potential upward price correction on the horizon.
With a considerable movement with a range from $94.7 to $97.04 in the last session, AMD’s Average True Range (ATR) stands at 3.88, signifying substantial volatility. The MACD (Moving Average Convergence Divergence) for the past three months is 1.48, indicating a possible bullish trend in the short term. The stock has current resistance and support levels at $101.8 and $96.11, respectively.
Future Outlook
With a discounted cash flow (DCF) value of $99.26, the stock is currently undervalued, providing an opportunity for potential price appreciation. The upcoming earnings announcement can be a sentiment driver for the stock, and investors will be keen to see if AMD can meet or surpass its earnings expectations.
Looking ahead for the upcoming week, considering the volatility signified by the ATR, the stock's price might vary within a range. If it can break through the resistance level, the stock has a chance to approach its 50-day moving average price. However, if the stock falls below its support, it could descend further.
Stock Evaluation
Overall, considering the above analysis, AMD's stock is classified as a "Hold". While the company has a "Buy" consensus from expert ratings and shows some bullish short-term technical indicators, the negative EPS and PE, along with trading below the 50-day and 200-day moving averages, indicate caution. The upcoming earnings announcement, which is expected to be substantial, could significantly impact the short-term stock movement. Therefore, it is recommended to maintain a "Hold" position until the earnings release for potentially higher clarity and confirmation.
