Competitor Analysis: Evaluating Advanced Micro Devices And Competitors In Semiconductors & Semiconductor Equipment Industry

Benzinga - by Benzinga Insights, Benzinga Staff Writer.

In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Advanced Micro Devices (NASDAQ:AMD) in relation to its major competitors in the Semiconductors & Semiconductor Equipment industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.

Advanced Micro Devices Background Advanced Micro Devices designs a variety of digital semiconductors for markets such as PCs, gaming consoles, data centers, industrial, and automotive applications, among others. AMD's traditional strength was in central processing units, CPUs, and graphics processing units, or GPUs, used in PCs and data centers. Additionally, the firm supplies the chips found in prominent game consoles such as the Sony PlayStation and Microsoft Xbox. In 2022, the firm acquired field-programmable gate array, or FPGA, leader Xilinx to diversify its business and augment its opportunities in key end markets such as the data center and automotive.

CompanyP/EP/BP/SROEEBITDA (in billions)Gross Profit (in billions)Revenue Growth

Advanced Micro Devices Inc	980.27	3.17	7.92	0.05%	$0.9	$2.44	-18.18%
NVIDIA Corp	105.09	39.07	33.17	23.79%	$7.41	$9.46	101.48%
Taiwan Semiconductor Manufacturing Co Ltd	16.16	4.53	6.83	5.8%	$341.62	$260.2	-9.98%
Broadcom Inc	26.81	16.29	10.27	14.98%	$4.91	$6.16	4.87%
Texas Instruments Inc	19.08	8.04	7.45	10.44%	$2.34	$2.81	-13.53%
Qualcomm Inc	17.99	6.05	3.69	8.93%	$2.41	$4.66	-22.72%
Analog Devices Inc	22.36	2.28	6.53	2.44%	$1.53	$1.96	-1.07%
ARM Holdings PLC	134.15	12.84	20.36	2.54%	$0.15	$0.64	-2.46%
Microchip Technology Inc	17	5.86	4.66	9.99%	$1.12	$1.56	16.55%
STMicroelectronics NV	8.63	2.34	2.17	7.28%	$1.64	$2.11	2.55%
ON Semiconductor Corp	13.43	3.83	3.59	8.05%	$0.87	$1.03	-0.54%
GLOBALFOUNDRIES Inc	18.66	2.64	3.56	2.31%	$0.63	$0.53	-7.43%
United Microelectronics Corp	7.60	1.87	2.40	4.72%	$29.0	$20.46	-24.3%
ASE Technology Holding Co Ltd	14.92	1.85	0.91	3.06%	$28.07	$24.92	-18.27%
First Solar Inc	33.36	2.50	5	2.86%	$0.26	$0.31	30.55%
Skyworks Solutions Inc	13.79	2.43	2.89	3.37%	$0.39	$0.46	-13.09%
Lattice Semiconductor Corp	37.14	12.44	10.64	8.96%	$0.06	$0.13	1.1%
Universal Display Corp	32.66	5.02	11.13	3.75%	$0.07	$0.11	7.33%
Rambus Inc	20.82	6.23	13.04	10.86%	$0.11	$0.08	-12.13%
MACOM Technology Solutions Holdings Inc	16.92	5.65	7.68	1.31%	$0.03	$0.09	-13.78%
Allegro Microsystems Inc	21	4.84	4.85	6.11%	$0.08	$0.16	27.8%
Average	29.88	7.33	8.04	7.08%	$21.13	$16.89	2.65%

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.dividend-frequency { font-size: 12px; color: #6c757d; } Through an analysis of Advanced Micro Devices, we can infer the following trends:

• The Price to Earnings ratio of 980.27 for this company is 32.81x above the industry average, indicating a premium valuation associated with the stock.

• The current Price to Book ratio of 3.17, which is 0.43x the industry average, is substantially lower than the industry average, indicating potential undervaluation.

• The Price to Sales ratio is 7.92, which is 0.99x the industry average. This suggests a possible undervaluation based on sales performance.

• The Return on Equity (ROE) of 0.05% is 7.03% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

• The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $900 Million, which is 0.04x below the industry average. This potentially indicates lower profitability or financial challenges.

• The company has lower gross profit of $2.44 Billion, which indicates 0.14x below the industry average. This potentially indicates lower revenue after accounting for production costs.

• The company's revenue growth of -18.18% is significantly lower compared to the industry average of 2.65%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

In terms of the Debt-to-Equity ratio, Advanced Micro Devices can be assessed by comparing it to its top 4 peers, resulting in the following observations:

• When considering the debt-to-equity ratio, Advanced Micro Devices exhibits a stronger financial position compared to its top 4 peers.

• This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.05, which can be perceived as a positive aspect by investors.

Key Takeaways The valuation analysis for Advanced Micro Devices in the Semiconductors & Semiconductor Equipment industry indicates a high PE ratio, suggesting that the company's stock may be overvalued compared to its peers. The low PB and PS ratios indicate that the company's stock may be undervalued in terms of its book value and sales. The low ROE, EBITDA, gross profit, and revenue growth ratios suggest that Advanced Micro Devices may be facing challenges in generating profits and growing its business compared to its industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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