Advanced Micro Devices, Inc. (AMD): investment thesis checklist
What a value investor writing down why they own Advanced Micro Devices, Inc. would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 2.8% in FY2024; between 2.8% and 55.1% over 3 filed years, median 27.7%. Does the thesis need it to stay inside that range?
- Return on equity: 6.9% in FY2025; between -104.4% and 42.7% over 10 filed years, median 4.9%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 1.9% in FY2025; between -1.0% and 3.1% over 10 filed years, median 0.6%. Does the thesis need it to stay inside that range?
- EV to EBIT: 95.04x in FY2025; between 42.42x and 597.18x over 8 filed years, median 80.50x. Does the thesis need it to stay inside that range?
- Price to earnings: 81.13x in FY2025; between 44.57x and 278.13x over 8 filed years, median 79.12x. Does the thesis need it to stay inside that range?
- Gross margin: 49.5% in FY2025; between 23.5% and 49.5% over 10 filed years, median 44.7%. Does the thesis need it to stay inside that range?
- Operating margin: 10.7% in FY2025; between -8.7% and 22.2% over 10 filed years, median 7.2%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: -0.16x in FY2025; between -1.10x and 0.28x over 8 filed years, median -0.54x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 28.8% in FY2025; between -8.2% and 34.7% over 10 filed years, median 24.0%. Does the thesis need it to stay inside that range?
- Share count change: -0.1% in FY2025; between -0.1% and 27.8% over 10 filed years, median 5.9%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from Advanced Micro Devices, Inc.'s own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 0.1x
Today 0.08x. Replayed over 8 filed years, it would have broken in 2; most recently FY2019, at 0.26x (10-K, filed 2020-02-04).
Revenue Growth 1Y stays at or above 0%
Today 34.34%. Replayed over 9 filed years, it would have broken in 1; most recently FY2023, at -3.9% (10-K, filed 2024-01-31).
Current Ratio stays at or above 2.28x
Today 2.85x. Replayed over 10 filed years, it would have broken in 5; most recently FY2021, at 2.02x (10-K, filed 2022-02-03).
3. What would break it
- A filed year in which debt to equity rose above 0.1x.
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which current ratio fell below 2.28x.
4. The published tests it meets today
Of 30 tests value investors published: 2 met, 26 not met, 2 we could not complete. Counts, never a score.
Meets: Three forensic scores; Z-score and coverage (Edward Altman).
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.