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"Long AMD" are you expecting a higher stock price? because their 90 PE TTM doesn't look like it's in line with the rest of the industry. don't get me wrong, i

by kmlx 7y ago

"Long AMD" are you expecting a higher stock price? because their 90 PE TTM doesn't look like it's in line with the rest of the industry. don't get me wrong, i was also long AMD, and still partly am, but i don't think the stock can go higher than 36-37, or even maintain that level long term, without some some mega quarters. which according to their own estimates will not be the case.

sobani 7y ago
last quarter AMD spend ~$400MM on R&D, had a revenue of ~$1800MM and net income of ~$120MM. Intel had a revenue of ~$19000MM, or about 10 times that of AMD, so it's completely realistic for AMD to double their revenue in a 'short' time frame. So if we assume no other fixed costs, then to get $1800MM of revenue costs (1800 - 400 - 120) $1280MM. So doubling revenue would cost $2560MM. Then net profit could be (3600 - 2560 - 400) $640MM, or about a 5x of current net profit, which would put the PE at 18. A PE of 18 would be very nice. And this is assuming there are no fixed costs besides R&D (like marketing of office buildings) and AMD only taking 10% of Intel's revenue.
zymhan 7y ago
Agreed, while AMD has a lot of market potential, their stock is overvalued given current performance. I'm rooting for them, and I want to put money on them, but I sold my shares I got for <$10 and I can't imagine getting back in at over $30.
- NicoJuicy 7y ago
  I was in the same situation ( 3 to 10 and then 25 to 36 now). It ain't going to stop untill 2022. And if you believe Intel, it's 2021 instead of 2022 ;) PS. Facts related: AMD Gains Chip Market Share in Nearly Every Category.
  - zymhan 7y ago
    Sure, but it's really easy for them to post massive growth in the server category since they started with market share in the low single digits. They have nowhere to go but up, but that can still mean their stock price is too high.
NicoJuicy 7y ago
Yes, i'm expecting stock price according how much they capture from Intel. And they are capturing it fast. As said before: Servers, laptops, ... are coming and that's the profit-market for CPU's and they aren't abandoning their nich ( semi-custom) also. it was 40 in 2000, the current buy prediction is 40. They are doing way better now and they have another full year to win market share. I compare against Intel, not against AMD at the current ( minimalistic) state, mostly because OEM's weren't onboard in the previous financial quarter. I have also explained my financial relation to them and my belief. Which seemed enough, no? PS. I'm probably one of the few to share my financial relation. Not because i'm scared, but because i'm confident :) And also, i feel kinda sorrow for you that you don't attack my comments/facts. You just attacked my personal gain, which is a feedback loop to my arguments. PS. I don't know of any other company that is in such a positive position. One full year untill their competition has a competitor to their "current" product line. That's insane. I haven't even mentioned TSMC 3 nanometer process for 2023 and theri future product line :)
- solotronics 7y ago
  Exactly market cap of AMD is 35 and Intel is 250. Even if AMD can only manage to steal half of that they will do phenomenally well.
riku_iki 7y ago
> 90 PE High P/E can mean that company reinvests profit to the business, instead of stockpiling it. Amazon has 80 P/E for example. I would be more concerned about very moderate revenue growth, looks like consumers don't rush switching to AMD.
- NicoJuicy 7y ago
  DIY builders already changed ( https://www.amazon.com/Best-Sellers-Computers-Accessories-Computer-CPU-Processors/zgbs/pc/229189 https://www.amazon.com/Best-Sellers-Computers-Accessories-Co... ) and OEM's will probably join. I think one reason their PE is so high is because their price is very competitive and they are very slow on raising average sale price. It's only very recently that the flagship of Microsoft changed to AMD. I'm waiting for some OEM's to follow after this. This happened on the end of previous quarter. As explained before. I think the cloud custumors can change faster than the consumer market though. As they will analyze price with performance and AMD has another year of "playing around", until 2021 or even 2022
Jaegs 7y ago
AMD just had their Q3 and then guided Q4 to be higher than Q3 for the first time in years. That means they are suddenly experiencing revenue growth that is outstripping their typical seasonal pattern and thats a huge deal.

by kmlx 7y ago

sobani 7y ago

last quarter AMD spend ~$400MM on R&D, had a revenue of ~$1800MM and net income of ~$120MM. Intel had a revenue of ~$19000MM, or about 10 times that of AMD, so it's completely realistic for AMD to double their revenue in a 'short' time frame. So if we assume no other fixed costs, then to get $1800MM of revenue costs (1800 - 400 - 120) $1280MM. So doubling revenue would cost $2560MM. Then net profit could be (3600 - 2560 - 400) $640MM, or about a 5x of current net profit, which would put the PE at 18. A PE of 18 would be very nice. And this is assuming there are no fixed costs besides R&D (like marketing of office buildings) and AMD only taking 10% of Intel's revenue.

zymhan 7y ago

Agreed, while AMD has a lot of market potential, their stock is overvalued given current performance. I'm rooting for them, and I want to put money on them, but I sold my shares I got for <$10 and I can't imagine getting back in at over $30.

NicoJuicy 7y ago
I was in the same situation ( 3 to 10 and then 25 to 36 now). It ain't going to stop untill 2022. And if you believe Intel, it's 2021 instead of 2022 ;) PS. Facts related: AMD Gains Chip Market Share in Nearly Every Category.
- zymhan 7y ago
  Sure, but it's really easy for them to post massive growth in the server category since they started with market share in the low single digits. They have nowhere to go but up, but that can still mean their stock price is too high.

NicoJuicy 7y ago

Yes, i'm expecting stock price according how much they capture from Intel. And they are capturing it fast. As said before: Servers, laptops, ... are coming and that's the profit-market for CPU's and they aren't abandoning their nich ( semi-custom) also. it was 40 in 2000, the current buy prediction is 40. They are doing way better now and they have another full year to win market share. I compare against Intel, not against AMD at the current ( minimalistic) state, mostly because OEM's weren't onboard in the previous financial quarter. I have also explained my financial relation to them and my belief. Which seemed enough, no? PS. I'm probably one of the few to share my financial relation. Not because i'm scared, but because i'm confident :) And also, i feel kinda sorrow for you that you don't attack my comments/facts. You just attacked my personal gain, which is a feedback loop to my arguments. PS. I don't know of any other company that is in such a positive position. One full year untill their competition has a competitor to their "current" product line. That's insane. I haven't even mentioned TSMC 3 nanometer process for 2023 and theri future product line :)

solotronics 7y ago
Exactly market cap of AMD is 35 and Intel is 250. Even if AMD can only manage to steal half of that they will do phenomenally well.

riku_iki 7y ago

> 90 PE High P/E can mean that company reinvests profit to the business, instead of stockpiling it. Amazon has 80 P/E for example. I would be more concerned about very moderate revenue growth, looks like consumers don't rush switching to AMD.

NicoJuicy 7y ago
DIY builders already changed ( https://www.amazon.com/Best-Sellers-Computers-Accessories-Computer-CPU-Processors/zgbs/pc/229189 https://www.amazon.com/Best-Sellers-Computers-Accessories-Co... ) and OEM's will probably join. I think one reason their PE is so high is because their price is very competitive and they are very slow on raising average sale price. It's only very recently that the flagship of Microsoft changed to AMD. I'm waiting for some OEM's to follow after this. This happened on the end of previous quarter. As explained before. I think the cloud custumors can change faster than the consumer market though. As they will analyze price with performance and AMD has another year of "playing around", until 2021 or even 2022

Jaegs 7y ago

AMD just had their Q3 and then guided Q4 to be higher than Q3 for the first time in years. That means they are suddenly experiencing revenue growth that is outstripping their typical seasonal pattern and thats a huge deal.