Advanced Micro Devices (NASDAQ:AMD) Shares Down 8.1% on Disappointing Earnings

Key Points

• Advanced Micro Devices (AMD) shares fell 8.1% after the company reported quarterly earnings of $0.48 EPS, missing estimates by $0.06.
• The company's revenue was $7.69 billion, exceeding expectations of $7.41 billion, and marking a 31.7% year-over-year increase.
• AMD has initiated a $6 billion share repurchase program, indicating confidence in the undervaluation of its stock.

Advanced Micro Devices, Inc. (NASDAQ:AMD - Get Free Report)'s share price was down 8.1% during trading on Wednesday after the company announced weaker than expected quarterly earnings. The company traded as low as $157.80 and last traded at $160.18. Approximately 58,421,943 shares changed hands during trading, an increase of 30% from the average daily volume of 45,089,320 shares. The stock had previously closed at $174.31.

The semiconductor manufacturer reported $0.48 EPS for the quarter, missing the consensus estimate of $0.54 by ($0.06). Advanced Micro Devices had a return on equity of 8.30% and a net margin of 8.03%. The firm had revenue of $7.69 billion for the quarter, compared to analysts' expectations of $7.41 billion. During the same period last year, the firm earned $0.69 EPS. Advanced Micro Devices's revenue was up 31.7% compared to the same quarter last year.

Advanced Micro Devices announced that its board has approved a share repurchase program on Wednesday, May 14th that permits the company to buyback $6.00 billion in shares. This buyback authorization permits the semiconductor manufacturer to purchase up to 3.1% of its stock through open market purchases. Stock buyback programs are generally an indication that the company's leadership believes its stock is undervalued.

Analyst Ratings Changes

A number of research firms have recently commented on AMD. Benchmark upped their price objective on Advanced Micro Devices from $170.00 to $210.00 and gave the stock a "buy" rating in a report on Wednesday. Susquehanna increased their price target on shares of Advanced Micro Devices from $135.00 to $210.00 and gave the stock a "positive" rating in a research report on Wednesday, July 30th. Mizuho increased their price target on shares of Advanced Micro Devices from $152.00 to $175.00 and gave the stock an "outperform" rating in a research report on Wednesday, July 16th. Hsbc Global Res upgraded shares of Advanced Micro Devices from a "hold" rating to a "strong-buy" rating in a research note on Thursday, July 10th. Finally, Wedbush restated an "outperform" rating and set a $120.00 target price (up from $115.00) on shares of Advanced Micro Devices in a report on Wednesday, May 7th. One investment analyst has rated the stock with a sell rating, eleven have assigned a hold rating, twenty-three have issued a buy rating and four have assigned a strong buy rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $176.10.

Insider Buying and Selling at Advanced Micro Devices

In related news, EVP Mark D. Papermaster sold 17,998 shares of the business's stock in a transaction that occurred on Tuesday, July 15th. The shares were sold at an average price of $155.03, for a total transaction of $2,790,229.94. Following the completion of the sale, the executive vice president directly owned 1,713,710 shares of the company's stock, valued at $265,676,461.30. The trade was a 1.04% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this link. 0.06% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Advanced Micro Devices

Several hedge funds have recently bought and sold shares of the company. Toronto Dominion Bank increased its position in shares of Advanced Micro Devices by 443.3% during the fourth quarter. Toronto Dominion Bank now owns 5,467,956 shares of the semiconductor manufacturer's stock worth $660,475,000 after acquiring an additional 4,461,609 shares in the last quarter. Nicolet Bankshares Inc. boosted its holdings in Advanced Micro Devices by 56.4% during the fourth quarter. Nicolet Bankshares Inc. now owns 3,523 shares of the semiconductor manufacturer's stock worth $426,000 after purchasing an additional 1,271 shares during the last quarter. Bank Pictet & Cie Europe AG lifted its stake in Advanced Micro Devices by 12.7% in the fourth quarter. Bank Pictet & Cie Europe AG now owns 264,574 shares of the semiconductor manufacturer's stock valued at $31,958,000 after acquiring an additional 29,825 shares during the last quarter. Heritage Trust Co acquired a new stake in Advanced Micro Devices in the fourth quarter valued at $804,000. Finally, Valicenti Advisory Services Inc. lifted its stake in Advanced Micro Devices by 4.0% in the first quarter. Valicenti Advisory Services Inc. now owns 76,826 shares of the semiconductor manufacturer's stock valued at $7,893,000 after acquiring an additional 2,944 shares during the last quarter. 71.34% of the stock is currently owned by institutional investors and hedge funds.

Advanced Micro Devices Trading Down 7.8%

The stock has a market cap of $260.64 billion, a price-to-earnings ratio of 117.78, a PEG ratio of 2.34 and a beta of 1.94. The company has a quick ratio of 1.97, a current ratio of 2.80 and a debt-to-equity ratio of 0.06. The business's 50 day simple moving average is $141.11 and its 200 day simple moving average is $117.23.

Advanced Micro Devices Company Profile

Advanced Micro Devices, Inc operates as a semiconductor company worldwide. It operates through Data Center, Client, Gaming, and Embedded segments. The company offers x86 microprocessors and graphics processing units (GPUs) as an accelerated processing unit, chipsets, data center, and professional GPUs; and embedded processors, and semi-custom system-on-chip (SoC) products, microprocessor and SoC development services and technology, data processing unites, field programmable gate arrays (FPGA), and adaptive SoC products.

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