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3 Reasons I Believe AMD Is at a Great Price Right Now

By Jose Najarro - May 20, 2021 at 10:30AM

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AMD's management team believes the best way to return value to shareholders is through a buyback program. Is now the time to buy?

In today's video, I look at Advanced Micro Devices (AMD 0.18%), which just announced a $4 billion share repurchase program. Below I share three reasons why I believe AMD is sitting at attractive levels right now.

  1. AMD is growing at impressive levels, and its growth is expected to continue. AMD reported 93% year-over-year (YOY) total revenue growth for the first quarter of 2021 and gave guidance of roughly 50% YOY growth for FY 2021.
  2. Fundamentally AMD is pretty strong, with positive cash flow from operations, profitable earnings, and a strong balance sheet of roughly $3.1 billion in cash and short-term investments compared to $272 million in debt.
  3. Looking at AMD's ratio of forward enterprise value to earnings before interest, tax, depreciation, and amortization shows that the company is a bit undervalued compared to the past year. The forward-EV-to-EBITDA ratio is roughly 25, a level last seen during the correction of March 2020. 

Click the video below for my full thoughts. 

*Stock Prices used were the midday prices of May 19, 2021. The video was published on May 19, 2021. 


 

Jose Najarro owns shares of Advanced Micro Devices. The Motley Fool owns shares of and recommends Xilinx. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
AMD
$101.01 (0.18%) $0.18
Xilinx, Inc. Stock Quote
Xilinx, Inc.
XLNX

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