Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Advanced Micro Devices Inc. (NASDAQ:AMD)

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Present Value of Free Cash Flow to Equity (FCFE)

Intermediate level

Intrinsic Stock Value (Valuation Summary)

Advanced Micro Devices Inc., free cash flow to equity (FCFE) forecast

Stock valuation by this method is not possible because prior year FCFE is less than zero.

US$ in millions, except per share data

Microsoft Excel LibreOffice Calc
Year Value FCFEt or Terminal value (TVt) Calculation Present value at
01 FCFE0
1 FCFE1 = × (1 + )
2 FCFE2 = × (1 + )
3 FCFE3 = × (1 + )
4 FCFE4 = × (1 + )
5 FCFE5 = × (1 + )
5 Terminal value (TV5) = × (1 + ) ÷ ()
Intrinsic value of Advanced Micro Devices Inc.’s common stock
 
Intrinsic value of Advanced Micro Devices Inc.’s common stock (per share)
Current share price

Based on: 10-K (filing date: 2020-02-04).

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.


Required Rate of Return (r)

Microsoft Excel LibreOffice Calc
Assumptions
Rate of return on LT Treasury Composite1 RF
Expected rate of return on market portfolio2 E(RM)
Systematic risk of Advanced Micro Devices Inc.’s common stock βAMD
 
Required rate of return on Advanced Micro Devices Inc.’s common stock3 rAMD

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 rAMD = RF + βAMD [E(RM) – RF]
= + []
=


FCFE Growth Rate (g)

FCFE growth rate (g) implied by PRAT model

Advanced Micro Devices Inc., PRAT model

Microsoft Excel LibreOffice Calc
Average Dec 28, 2019 Dec 29, 2018 Dec 30, 2017 Dec 31, 2016 Dec 26, 2015
Selected Financial Data (US$ in millions)
Net income (loss)
Net revenue
Total assets
Stockholders’ equity (deficit)
Financial Ratios
Retention rate1
Profit margin2
Asset turnover3
Financial leverage4
Averages
Retention rate
Profit margin
Asset turnover
Financial leverage
 
FCFE growth rate (g)5

Based on: 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-18).

2019 Calculations

1 Company does not pay dividends

2 Profit margin = 100 × Net income (loss) ÷ Net revenue
= 100 × ÷ =

3 Asset turnover = Net revenue ÷ Total assets
= ÷ =

4 Financial leverage = Total assets ÷ Stockholders’ equity (deficit)
= ÷ =

5 g = Retention rate × Profit margin × Asset turnover × Financial leverage
= × × × =


FCFE growth rate (g) forecast

Advanced Micro Devices Inc., H-model

Microsoft Excel LibreOffice Calc
Year Value gt
1 g1
2 g2
3 g3
4 g4
5 and thereafter g5

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpoltion between g1 and g5

Calculations

g2 = g1 + (g5g1) × (2 – 1) ÷ (5 – 1)
= + () × (2 – 1) ÷ (5 – 1) =

g3 = g1 + (g5g1) × (3 – 1) ÷ (5 – 1)
= + () × (3 – 1) ÷ (5 – 1) =

g4 = g1 + (g5g1) × (4 – 1) ÷ (5 – 1)
= + () × (4 – 1) ÷ (5 – 1) =