Financial Analysis: Advanced Micro Devices (NASDAQ:AMD) & Viavi Solutions (NASDAQ:VIAV)

Advanced Micro Devices (NASDAQ:AMD) and Viavi Solutions (NASDAQ:VIAV) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Profitability

This table compares Advanced Micro Devices and Viavi Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Micro Devices 4.46% 25.23% 7.12%
Viavi Solutions -3.25% 15.88% 6.06%

Earnings and Valuation

This table compares Advanced Micro Devices and Viavi Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Micro Devices $6.48 billion 5.43 $337.00 million $0.35 92.89
Viavi Solutions $880.40 million 3.70 -$46.00 million $0.34 41.94

Advanced Micro Devices has higher revenue and earnings than Viavi Solutions. Viavi Solutions is trading at a lower price-to-earnings ratio than Advanced Micro Devices, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Advanced Micro Devices and Viavi Solutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Micro Devices 1 12 14 0 2.48
Viavi Solutions 0 2 7 0 2.78

Advanced Micro Devices currently has a consensus price target of $30.40, indicating a potential downside of 6.49%. Viavi Solutions has a consensus price target of $13.93, indicating a potential downside of 2.32%. Given Viavi Solutions’ stronger consensus rating and higher possible upside, analysts clearly believe Viavi Solutions is more favorable than Advanced Micro Devices.

Risk and Volatility

Advanced Micro Devices has a beta of 3.08, meaning that its stock price is 208% more volatile than the S&P 500. Comparatively, Viavi Solutions has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Insider & Institutional Ownership

60.8% of Advanced Micro Devices shares are owned by institutional investors. Comparatively, 92.8% of Viavi Solutions shares are owned by institutional investors. 1.5% of Advanced Micro Devices shares are owned by company insiders. Comparatively, 0.5% of Viavi Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Advanced Micro Devices beats Viavi Solutions on 11 of the 14 factors compared between the two stocks.

About Advanced Micro Devices

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom. Its products include x86 microprocessors as an accelerated processing unit (APU), chipsets, discrete and integrated graphics processing units (GPUs), and professional GPUs; and server and embedded processors, and semi-custom System-on-Chip (SoC) products and technology for game consoles. The company provides x86 microprocessors for desktop PCs under the AMD Ryzen, AMD Ryzen PRO, Threadripper, AMD A-Series, AMD FX, AMD Athlon, AMD Athlon PRO, and AMD Pro A-Series processors brands; microprocessors for notebook and 2-in-1s under the AMD Ryzen processors with Radeon Vega GPUs, AMD A-Series, AMD Athlon, AMD Ryzen PRO, and AMD Pro A-Series processors brands; microprocessors for servers under the AMD EPYC and AMD Opteron brands; and chipsets under the AMD trademark. It also offers discrete GPUs for desktop and notebook PCs under the AMD Radeon graphics and AMD Embedded Radeon brands; professional graphics products under the AMD Radeon Pro and AMD FirePro graphics brands; and Radeon Instinct accelerators for servers. In addition, the company provides embedded processor solutions for interactive digital signage, casino gaming, and medical imaging under the AMD Opteron, AMD Athlon, AMD Geode, AMD Ryzen, AMD EPYC, AMD R-Series, and G-Series processors brands; and customer-specific solutions based on AMD's CPU, GPU, and multi-media technologies, as well as semi-custom SoC products. It serves original equipment and design manufacturers, datacenters, original design manufacturers, system integrators, distributors, and add-in-board manufacturers through its direct sales force, independent distributors, and sales representatives. Advanced Micro Devices, Inc. was founded in 1969 and is headquartered in Santa Clara, California.

About Viavi Solutions

Viavi Solutions Inc. provides network test, monitoring, and assurance solutions to communications service providers, enterprises, network equipment manufacturers, civil government, military, and avionics customers worldwide. The company operates through Network Enablement, Service Enablement, and Optical Security and Performance Products segments. The Network Enablement segment offers testing solutions that access the network to perform build-out and maintenance tasks. This segment provides solutions that include instruments, software, and services to design, build, activate, certify, troubleshoot, and optimize networks. It also offers support and professional services, such as repair, calibration, software support, and technical assistance for the products; and system integration projects, including project management, installation, and implementation, as well as product and technology training, and consulting services. The Service Enablement segment provides embedded systems and enterprise performance management solutions for communication service providers, enterprises, and cloud operators with visibility into network, service, and application data. Its solutions include instruments, microprobes, and software, which monitor, collect, and analyze network data to reveal the actual customer experience and to identify opportunities for new revenue streams and network optimization. The Optical Security and Performance Products segment offers optical products for anti-counterfeiting, government, industrial, automotive, and consumer electronic markets, including 3D sensing applications. The company was formerly known as JDS Uniphase Corporation and changed its name to Viavi Solutions Inc. in August 2015. Viavi Solutions Inc. was founded in 1979 and is headquartered in San Jose, California.

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