Semiconductor underdog Advanced Micro Devices
What Fools say
Here's how AMD's CAPS rating stacks up against some of its peers and competitors:
| Company |
Market Cap (billions) |
Trailing P/E Ratio |
CAPS Rating |
|---|---|---|---|
|
Intel |
$73.42 |
14.3 |
**** |
|
Texas Instruments |
$19.2 |
7.8 |
**** |
|
NVIDIA |
$4.0 |
11.9 |
**** |
|
Sun Microsystems |
$2.73 |
N/A |
** |
|
AMD |
$1.26 |
N/A |
** |
Data taken from Motley Fool CAPS on 01/20/2009. Financial data courtesy of Yahoo! Finance.
CAPS member skymutt2 wrote the following in bearish volley in early December: "Burning thru cash, loads of debt, no end in sight for the losses." Ouch.
"This is a big one for a come back," says all-star member Vet67to82, who has an "outperform" rating on AMD. "Intel's only competition ... AND saving Intel from regulatory heat as a monopoly. Intel needs AMD to survive and prosper. ... Less price competition will be good for both companies bottom lines. Soooo, I'm looking for AMD to go from $2.00 to $10 to $20."
What management does
Small children and seniors with heart conditions shouldn't look too closely at the net income margin. It's scary stuff. But gross margins have come back to life despite the raging economic hurricane, and sales growth is healthy again. It ain't all bad news, amigo.
|
6/2007 |
9/2007 |
12/2007 |
3/2008 |
6/2008 |
9/2008 |
|
|---|---|---|---|---|---|---|
|
Gross |
38.6% |
36.4% |
37.6% |
40.2% |
44.0% |
46.7% |
|
Operating |
(12.8%) |
(18.1%) |
(20.4%) |
(15.9%) |
(11.6%) |
(6.1%) |
|
Net |
(29.8%) |
(37.4%) |
(56.2%) |
(49.3%) |
(58.2%) |
(52.2%) |
|
FCF/Revenue |
(39.4%) |
(37.4%) |
(33.2%) |
(27.7%) |
(16.6%) |
(17.6%) |
|
Growth (YOY) |
6/2007 |
9/2007 |
12/2007 |
3/2008 |
6/2008 |
9/2008 |
|---|---|---|---|---|---|---|
|
Revenue |
(6.3%) |
2.3% |
6.4% |
16.4% |
15.1% |
14.3% |
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.
One Fool says
A fresh round of job cuts and salary reductions is bad tidings indeed, and we shouldn't expect this week's earnings report to impress anyone. Even mighty Intel is feeling the heat these days, putting a stop to a normally quite generous share buyback program in order to preserve cash.
So here's the good news: It won't get any worse. I think it's safe to assume that there won't be any expensive price wars this year, given Intel's cash-saving attitude. AMD's spin-out of its manufacturing operations should close in a matter of weeks, and the company's own balance sheet will breathe a lot easier after that. Saudi Arabian investors are picking up $1.2 billion of AMD's long-term debt and investing $3.6 billion directly into the as-yet unnamed foundry company. That's a healthy investment infusion into AMD's anemic arm, and it removes the burden of running an expensive high-tech semiconductor manufacturing operation.
The worst-case scenario I can think of is IBM
Further Foolishness:
