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.
- 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.
- 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.
- 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.