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Comparative Study: Advanced Micro Devices And Industry Competitors In Semiconductors & Semiconductor Equipment Industry
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Comparative Study: Advanced Micro Devices And Industry Competitors In Semiconductors & Semiconductor Equipment Industry
Jul 1, 2024 8:35 AM

In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Advanced Micro Devices ( AMD ) against its key competitors in the Semiconductors & Semiconductor Equipment industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.

Advanced Micro Devices Background

Advanced Micro Devices ( AMD ) designs a variety of digital semiconductors for markets such as PCs, gaming consoles, data centers, industrial, and automotive applications, among others. AMD's traditional strength was in central processing units, CPUs, and graphics processing units, or GPUs, used in PCs and data centers. Additionally, the firm supplies the chips found in prominent game consoles such as the Sony PlayStation and Microsoft Xbox. In 2022, the firm acquired field-programmable gate array, or FPGA, leader Xilinx to diversify its business and augment its opportunities in key end markets such as the data center and automotive.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Advanced Micro Devices Inc ( AMD ) 235.09 4.67 11.61 0.22% $0.9 $2.56 2.24%
NVIDIA Corp 72.29 61.84 38.62 32.31% $17.75 $20.41 262.12%
Taiwan Semiconductor Manufacturing Co Ltd 33.77 8.09 13.09 6.38% $428.26 $314.51 16.52%
Broadcom Inc 69.15 10.68 16.93 3.02% $5.58 $7.78 42.99%
Qualcomm Inc 26.56 9.08 6.17 9.79% $3.08 $5.28 1.23%
Texas Instruments Inc 30.28 10.42 10.60 6.52% $1.77 $2.1 -16.4%
ARM Holdings PLC 564.21 32.38 52.86 4.35% $0.06 $0.89 46.6%
Intel Corp 31.93 1.24 2.37 -0.36% $2.09 $5.22 8.61%
Analog Devices Inc 53.34 3.21 10.91 0.85% $0.93 $1.18 -33.83%
Microchip Technology Inc 26.28 7.38 6.57 2.25% $0.47 $0.79 -40.62%
Monolithic Power Systems Inc 97.94 18.92 21.95 4.45% $0.1 $0.25 1.51%
STMicroelectronics NV 10.07 2.08 2.25 3.04% $1.06 $1.44 -18.41%
ON Semiconductor Corp 13.99 3.63 3.73 5.7% $0.71 $0.85 -4.95%
GLOBALFOUNDRIES Inc 31.40 2.48 3.96 1.19% $0.54 $0.39 -15.86%
ASE Technology Holding Co Ltd 23.22 2.76 1.39 1.94% $23.55 $20.87 1.46%
First Solar Inc 23.63 3.50 6.79 3.48% $0.36 $0.35 44.83%
United Microelectronics Corp 13.07 1.89 3.17 2.9% $24.0 $16.9 0.78%
Skyworks Solutions Inc 20.07 2.69 3.78 2.91% $0.31 $0.42 -9.29%
Universal Display Corp 45.71 6.72 16.39 3.86% $0.07 $0.13 26.67%
MACOM Technology Solutions Holdings Inc 125.39 7.70 12.64 1.45% $0.04 $0.1 6.98%
Lattice Semiconductor Corp 37.17 11.68 11.66 2.15% $0.03 $0.1 -23.6%
Cirrus Logic Inc 26.06 3.76 4 2.48% $0.07 $0.19 -0.27%
Average 65.5 10.1 11.9 4.79% $24.33 $19.05 14.15%

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After thoroughly examining Advanced Micro Devices ( AMD ), the following trends can be inferred:

Notably, the current Price to Earnings ratio for this stock, 235.09, is 3.59x above the industry norm, reflecting a higher valuation relative to the industry.

With a Price to Book ratio of 4.67, significantly falling below the industry average by 0.46x, it suggests undervaluation and the possibility of untapped growth prospects.

Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 11.61, which is 0.98x the industry average.

With a Return on Equity (ROE) of 0.22% that is 4.57% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $900 Million is 0.04x below the industry average, suggesting potential lower profitability or financial challenges.

Compared to its industry, the company has lower gross profit of $2.56 Billion, which indicates 0.13x below the industry average, potentially indicating lower revenue after accounting for production costs.

The company is witnessing a substantial decline in revenue growth, with a rate of 2.24% compared to the industry average of 14.15%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

By evaluating Advanced Micro Devices ( AMD ) against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

Advanced Micro Devices ( AMD ) demonstrates a stronger financial position compared to its top 4 peers in the sector.

With a lower debt-to-equity ratio of 0.05, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.

Key Takeaways

For Advanced Micro Devices ( AMD ), the PE ratio is high compared to peers, indicating potentially overvalued stock. The PB and PS ratios are low, suggesting undervaluation relative to industry competitors. In terms of ROE, EBITDA, gross profit, and revenue growth, Advanced Micro Devices ( AMD ) lags behind its peers, indicating weaker financial performance and growth prospects within the Semiconductors & Semiconductor Equipment industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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