Advanced Micro devices Inc.  (NASDAQ: AMD) offers innovtive high-performance computing, graphics and visualization technologies used for building blocks for gaming, immersive platforms and the data center.

Key Highlights:

• For FY21, the company reported its revenue of USD 16.4 billion, surged 68% on y-o-y basis. This was primarily driven by higher revenue in the Computing and Graphics and Enterprise, Embedded and Semi-Custom segments.
• Net income was up by 27% on y-o-y at USD 3.1 billion.
• The company’s quick ratio and current ratio stood 1.56x and 2.02x, respectively in Q4FY21, respectively, lower than the industry median of 2.40x and 3.15x, respectively.
• Cash conversion period stood at 72.4 days, as compared to the industry median of 103.9 days.
• During Q4FY21, the company witnessed strong demand for premium desktop and notebook PCs built with Ryzen 5000 processors.
  

Stock Recommendation:

The company is witnessing demand of its products and hence its free cash flows stood higher at USD 3.2 billion in FY21, up 314% than FY20. Hence, the stock move ahead of its fundamentals. Notably, the stock of AMD is available at a higher valuation of P/E multiples of 29.6x on NTM basis, as compared to the industry (Semiconductors & Semiconductor Equipment) mean of 7.7x. Hence, considering the aforesaid facts, we give a ‘Watch’ stance on the stock of AMD at the closing price of USD 123.67 on February 07, 2022.

One-Year Technical Price Chart (as on February 07, 2022). Analysis by Kalkine Group