![]() ![]() There is still optimism in the graphic processing unit (GPU) as the industry which is expected to grow more than 30% annually in the next five years. This has been the trend in recent quarters as the company attempts to navigate these headwinds including inflationary impacts on its high-margin enterprise business. The downbeat forecast for top and bottom line figures for the quarter and full year highlights the setbacks within the PC market and datacenter business segments that have impacted the quarterly results. For the full year, ending in December, earnings are expected to decline 18.5% year over year to $2.85 per share, while full-year revenue of $22.98 billion would decline 2.6% year over year. This compares to the year-ago quarter when earnings were $1.05 per share on $6.55 billion in revenue. Assuming the company’s growth metrics rebound in Q2 and the management issues strong guidance, this would present a great buying opportunity for AMD stock for the next 12 to 18 months, despite the strong run it has already been on.įor the three months that ended June, Wall Street expects the California-based company to earn 57 cents per share on revenue of $5.31 billion. ![]() As noted, the market broadly expects PC shipments to pick up, but there’s still the question of whether margin pressures have bottomed out and are ready for expansion. While AMD delivered a marginal beat on revenues, EPS fell short of expectations due to a sharp decline in global PC shipments. This is because even amid these challenges the company demonstrated strong operating leverage evidenced by its ability to grow profits at a faster rate than its revenue. Meanwhile, AMD stock, which is up 73% year to date, compared with a 18% rise in the S&P 500 index, assumes these issues are in the rearview mirror. Analysts will be also looking for further signs of improved assets turnover, namely the company’s acquisition of Pensando and Xilinx. Investors are anxious to see whether margin pressures have bottomed and are now ready for expansion. (See AMD stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. For the full year, earnings are expected to rise 25.8 year over year to 3.51 per share, while full-year revenue of 23.51 billion would rise 43.1 year over year. ![]()
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