ADVANCED MICRO DEVICES (NASDAQ:AMD) is not too expensive for the growth it is showing.

Discover ADVANCED MICRO DEVICES (NASDAQ:AMD), an undervalued growth gem identified by our stock screener. AMD is shining in terms of growth metrics, and it's also displaying strong financial health and profitability. What's more, it retains an appealing valuation. We'll break it down further.

Exploring AMD's Growth

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of AMD, the assigned 8 reflects its growth potential:

• The Earnings Per Share has grown by an impressive 25.28% over the past year.
• The Earnings Per Share has been growing by 38.99% on average over the past years. This is a very strong growth
• Looking at the last year, AMD shows a quite strong growth in Revenue. The Revenue has grown by 13.69% in the last year.
• Measured over the past years, AMD shows a very strong growth in Revenue. The Revenue has been growing by 30.81% on average per year.
• The Earnings Per Share is expected to grow by 27.14% on average over the next years. This is a very strong growth
• The Revenue is expected to grow by 16.71% on average over the next years. This is quite good.

Deciphering AMD's Valuation Rating

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of AMD, the assigned 5 reflects its valuation:

• Compared to the rest of the industry, the Price/Earnings ratio of AMD indicates a somewhat cheap valuation: AMD is cheaper than 62.04% of the companies listed in the same industry.
• Based on the Price/Forward Earnings ratio, AMD is valued a bit cheaper than 69.44% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of AMD may justify a higher PE ratio.
• A more expensive valuation may be justified as AMD's earnings are expected to grow with 31.27% in the coming years.

Health Assessment of AMD

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. AMD has achieved a 6 out of 10:

• An Altman-Z score of 9.66 indicates that AMD is not in any danger for bankruptcy at the moment.
• AMD has a Altman-Z score of 9.66. This is amongst the best in the industry. AMD outperforms 81.48% of its industry peers.
• The Debt to FCF ratio of AMD is 0.72, which is an excellent value as it means it would take AMD, only 0.72 years of fcf income to pay off all of its debts.
• AMD's Debt to FCF ratio of 0.72 is amongst the best of the industry. AMD outperforms 81.48% of its industry peers.
• AMD has a Debt/Equity ratio of 0.03. This is a healthy value indicating a solid balance between debt and equity.
• A Current Ratio of 2.62 indicates that AMD has no problem at all paying its short term obligations.

What does the Profitability looks like for AMD

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, AMD has achieved a 6:

• The last Return On Invested Capital (2.66%) for AMD is above the 3 year average (1.56%), which is a sign of increasing profitability.
• AMD's Profit Margin has improved in the last couple of years.
• AMD has a Operating Margin of 7.90%. This is in the better half of the industry: AMD outperforms 62.04% of its industry peers.
• The Gross Margin of AMD (49.35%) is better than 63.89% of its industry peers.
• In the last couple of years the Gross Margin of AMD has grown nicely.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of AMD

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.