Investors who picked up shares of Intel last year when the stock hovered between $21 and $26 per share have been quite handsomely rewarded; the stock now trades comfortably north of $32 per share. 

Of course, not everyone was so fortunate. What about investors who missed that initial run and now want to get in? Is now a good time to buy Intel shares? 

What does the business look like today?
Though Intel has a number of reportable segments, the three that really make an impact on the bottom line are the PC Client Group, the Data Center Group, and the Mobile and Communications Group.

During 2013, the PC Client Group represented approximately 63.1% of Intel's sales and generated $11.75 billion in operating income, while the Data Center Group made up 23% of sales and brought in a cool $5.57 billion in operating income. 

Intel's Mobile and Communications Group, on the other hand, did $1.375 billion in sales and incurred an operating loss of $3.15 billion in that time.

In other words, Intel's PC and Data Center groups together bring in over $17 billion in operating income, but heavy losses in the mobile group mask the company's true earnings potential.

That's bad news... and good news
The bad news here is that these losses in mobile are extremely heavy and will only get worse in 2014 as Intel's 2G/3G feature-phone business falls off and the roll-out of its LTE modem solutions has been delayed. Furthermore, Intel is taking a significant hit in providing contra-revenue support for its tablet platforms.

All said and done, Intel posted $12.29 billion in operating income during 2013, and -- given current guidance for 2014 -- should be on track to generate approximately $15.66 billion in operating income. That's even with a mobile operating loss that's set to exceed $4 billion for 2014.

So, an interesting way to value Intel would be to simply back out the mobile operating losses to understand the real earnings power of the business. While cold, hard cash is burned each year to support Intel's mobile investments, the reality is that in R&D-intensive industries, companies need to spend money to make money.

Ex-mobile, Intel could be meaningfully undervalued
Working under the assumption that Intel incurs an operating loss of approximately $4 billion in its mobile group this year, backing out mobile suggest a hypothetical operating income of $19.66 billion. Assuming a tax rate of about 28% (in line with what the tax rate looks like this year), this implies net income of $14.15 billion.

With a current share count of 4.97 billion (though it is set to come down significantly as Intel executes its recently announced $20 billion buyback program), this implies earnings per share ex-mobile of $2.84.

Even if the market prices Intel at a significant discount to the overall market -- let's say a multiple of between 12 and 14 times earnings, what investors are willing to value the company at -- then that would imply a share price of between $34 and $39 per share.

Some caveats to consider
The above calculation assumes Intel's mobile business gets to break-even (which may be several years away), and assumes the remainder of the business remains approximately flat. It also assumes Intel commands a fairly low multiple. 

That's where things get tricky.

Intel's Datacenter Group is likely to continue to see healthy, low double-digit percentage revenue growth. However, this will either be offset by a PC market that resumes its decline, or amplified by a PC market that returns to moderate -- but positive -- growth.

In the former situation, Intel shares look, at best, fairly valued, but in the latter situation, Intel shares could be significantly undervalued. 

Foolish bottom line
Given that the future performance of Intel's shares is highly dependent on the PC market, it'll be important to watch the trends there. If the PC market can return to even low single-digit long-term revenue growth, then Intel stock is materially undervalued, here, as its mobile losses are poised to shrink, and its Data Center Group revenues are likely to continue to grow.

While not quite the screaming buy that the shares were in the low to mid-$20 range, there's still potentially a lot of value here, depending on how the PC market trends, and how effective Intel's mobile push is over the next couple of years.