$AMD: Growing fundamentals = +$20?

UnknownUnicorn2421992の投稿

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AMD has been struggling since 08' both price wise, and with cash flows. AMD performed especially poorly through FY16, FY15, with negative free cash flows and shockingly terrible net incomes for 7 out of the 8 quarters, despite decent gross margins, between 20-30%, however, Nvidia has remained more capital efficient with 40-60% margins.

FY17 has been a strong indication for growth in terms of cash flows, with a positive net income, strong revenue growth, with costs maintained at previous levels. From 15' AMD has shown a very consistent quarterly basic EPS growth (aside from the massive shortfall in Q316) despite growing outstanding shares.

ACTUAL FINANCIALS: i.magaimg.net/img/2oi8.png
ACTUAL GROWTH: i.magaimg.net/img/2oi9.png

Revenue growth rate 15.65%
Sales Cost growth rate 11.06%
Comp & G growth rate 32%
Enterprise growth rate 2%
R&D growth rate 10.77%
MG&A growth rate 3.95%

Quarter vs Previous Quarter.

Revenue y/y -19.22% 9.02% 23.19% 15.45% 18.27% 18.99% 25.71% 33.82%
Sales Cost Growth y/y -20.03% -0.28% 51.82% 11.85% 15.99% 15.54% -14.26% 27.81%
Net Profit Margin -19.21% -18.57% -10.65% -13.10% 6.72% -31.06% -4.61% -7.42% -1.31% 4.32% 4.12%

FY18 - 30 FORCAST: i.magaimg.net/img/2oie.png
- assumed tax rate of 28%
- assumed growth maintained for short term, with stabilisation and decrease in beta
- assumed gross margins around 29%
- outstanding shares assumed 960

FY18-20 looks to maintain the streak of negative free cash flows, yet with positive growth and promising EPS, with an eventual EPS of 1.33 in FY30 @ 1,227 NET INCOME.

Model:

Forward term growth @ 2%
Basic Weighted Average Cost of Capital @ 5,2%
NPV: $23,444.09
Less cash holdings, (210)
NETNPV, (Enterprise VALUE): $23,234.09
/952
= Forward Market Price = $24.42

This coincides with multiple other analyst comments, specifically Hans Mosesmann upgraded Rosenblatt's rating from $22 to $27.

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