Competitor Analysis: Evaluating Advanced Micro Devices And Competitors In Semiconductors & Semiconductor Equipment Industry

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In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Advanced Micro Devices AMD in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.

Advanced Micro Devices Background

Advanced Micro Devices 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 248.78 4.94 12.29 0.22% $0.9 $2.56 -11.27%
NVIDIA Corp 66.65 57.01 35.61 32.31% $17.75 $20.41 17.83%
Taiwan Semiconductor Manufacturing Co Ltd 30.60 7.33 11.86 6.38% $428.26 $314.51 16.52%
Broadcom Inc 52.53 9.32 15.88 2.81% $4.61 $7.38 34.17%
Qualcomm Inc 28.41 9.72 6.60 9.79% $3.08 $5.28 1.23%
Texas Instruments Inc 31.06 10.69 10.87 6.52% $1.77 $2.1 -16.4%
Intel Corp 32.09 1.25 2.39 -0.36% $1.83 $5.22 -17.41%
ARM Holdings PLC 430.90 24.55 40.37 4.35% $0.06 $0.89 12.62%
Analog Devices Inc 54.54 3.29 11.16 0.85% $0.93 $1.18 -33.83%
Microchip Technology Inc 28.40 7.97 7.09 2.25% $0.47 $0.79 -40.62%
STMicroelectronics NV 10.74 2.21 2.39 3.04% $1.06 $1.44 -18.41%
Monolithic Power Systems Inc 90.53 17.49 20.30 4.45% $0.1 $0.25 1.51%
ON Semiconductor Corp 15.03 3.90 4.01 5.7% $0.71 $0.85 -4.95%
First Solar Inc 29.37 4.34 8.44 5.38% $0.36 $0.35 15.58%
GLOBALFOUNDRIES Inc 31.07 2.47 3.92 1.19% $0.54 $0.39 -15.86%
ASE Technology Holding Co Ltd 22.84 2.72 1.37 1.94% $23.55 $20.87 1.46%
United Microelectronics Corp 13.08 1.89 3.17 2.9% $24.0 $16.9 0.78%
Skyworks Solutions Inc 17.21 2.31 3.24 2.91% $0.31 $0.42 -9.29%
Lattice Semiconductor Corp 49.67 15.61 15.58 2.15% $0.03 $0.1 -23.6%
Universal Display Corp 39.45 5.80 14.14 3.86% $0.07 $0.13 26.67%
MACOM Technology Solutions Holdings Inc 117.42 7.21 11.84 1.45% $0.04 $0.1 6.98%
Cirrus Logic Inc 23.81 3.46 3.65 2.48% $0.05 $0.19 -39.93%
Average 57.88 9.55 11.14 4.87% $24.27 $19.04 -4.05%

Through a detailed examination of Advanced Micro Devices, we can deduce the following trends:

  • At 248.78, the stock's Price to Earnings ratio significantly exceeds the industry average by 4.3x, suggesting a premium valuation relative to industry peers.

  • Considering a Price to Book ratio of 4.94, which is well below the industry average by 0.52x, the stock may be undervalued based on its book value compared to its peers.

  • The Price to Sales ratio of 12.29, which is 1.1x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

  • The company has a lower Return on Equity (ROE) of 0.22%, which is 4.65% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

  • 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.

  • The company has lower gross profit of $2.56 Billion, which indicates 0.13x below the industry average. This potentially indicates lower revenue after accounting for production costs.

  • The company is witnessing a substantial decline in revenue growth, with a rate of -11.27% compared to the industry average of -4.05%, 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.

When comparing Advanced Micro Devices with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

  • Advanced Micro Devices has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.05.

  • This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

The high PE ratio of Advanced Micro Devices indicates that investors are willing to pay a premium for its earnings compared to its peers in the Semiconductors & Semiconductor Equipment industry. The low PB ratio suggests that the market values the company's assets at a lower price relative to its stock price. With a high PS ratio, Advanced Micro Devices is generating more revenue per share compared to its industry counterparts. On the other hand, the low ROE, EBITDA, gross profit, and revenue growth signify that the company may be less efficient in generating profits and growth compared to its industry peers.

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

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