PEG Ratio Explained - Intel vs AMD
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- čas přidán 5. 09. 2024
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In this video, we look at what the PEG ratio is and how it can be used. We use the PEG ratio to compare AMD to Intel to see which one looks better valued today.
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I like Jimmy. Jimmy gets to the point. Jimmy doesn’t make stupid cut scenes or bad jokes during the videos. Jimmy gives out a lot of information. Jimmy doesn’t waste my time. Thanks Jimmy!
Be like Jimmy.
Thanks jimmy , very helpful
Indeed! I feel like ripping my ears off with most financial youtubers. Not here! :D
Jimmy a legend fr.
This comment is perfect and cute, lol
Keep up the great work! Bought Intel at 49$. Seems like a good deal. AMD has the technological lead for now but it's also priced for perfection. Intel is priced for extreme distress. Be greedy when others are fearful and fearful when others are greedy!
@Ziggi Mon why do you say uncertain? Their revenues are immense and not shrinking, regardless of the whole 7nm debacle and other head winds.
It is pretty rare to see stock channel that actually bothered to show us beginners how these fundamentals worked exactly instead of just be like: oh this stock is a good buy because blah blah blah news/this ratio is all u need to know to buy. I never seen all of your videos as I am a new sub but from the few I've seen(since few months back), they were nothing but valuable and educational videos. Thanks.
Every single video:
Jimmy: Hi! I´m Jimmy.
Me: Hi Jimmy!
Same here🤣🤣🤣
Haha. Same!
Lol. Me too
Hi Jimmy! First of all i want to congratulate you for the super useful content you give us!! I found this channel a few months ago and i like a lot how you do your analysis / research and how you give your opinions based in facts and not in speculations.
Plus, i´m writing this comment in this video to ask you for one video idea. Actually, i'm very bullish on cibersecurity stocks because in my opinion they have a lot to growth in the next couple of years. However, before i make a final decision whether i would invest or not in this sector, i want to know your opinion based in your type of analysis/research you do, plus checking indicators like PEG ratio. Three of the most potencial companies i'm looking close are: Checkpoint (CHKP), Fortinet (FTNT) and maybe CyberArk (CYBR).
Thanks a lot for everything and please consider my idea.
Greetings from Portugal.
I’m just out here as a passive investor but learning stock valuations for fun. Maybe when the markets crash I’ll try allocating 5% of my portfolio im some individual stocks. But for now with overvalued stocks I’ll stick with a globally diversified etf
I love how you always have a way to link another video at the end of every video. Great youtube rabbit hole for your channel lol good work on the video! Keep them coming.
hello jimmy can you try todo a backtrack on a couple of companies that were at PEG < 1 and how they developed over time. To see if the indictor is actually working?
Great content and analysis. It's smart to not to heavily lean on one side, and left room for audience to think of it
One of the best channels about investing. Better than the other ''This stock will go up by 100000000000000000000000000000%'' type of videos. Thanks a lot for the effort you are putting into this and sharing your knowledge.
I've just started watching your videos Jimmy. I just wanna thank you for the crystal clear explanation about this topic. Regards from Brazil!
i love the peg ratio combined with a fair forward PE for expected growth. with also understanding thhe trend of that business and product! especially if its a growth company and i cant use discounted free chashflow!
cool video Jimmy. could you please make one and explain how to calculate intrinsic value of a company? keep up the good work!
Omg this what I was looking for. Thank you so much!
Don't be afraid to join because I am a living testimony
This is a great explanation of PEG ratio. Just my 2 cents about amd/intel. The growth numbers we use in this model come from financial analysts/historical data and are only as good as the estimate. But behind the scenes, Intel just gave up on 7nm chips and things aren’t looking too good. They previously fabricated their own chips while AMD and majority of other companies have just source it from Taiwan Semiconductor. This allows companies to focus on the areas they are good at rather than intel who is in a bit of a bind now, give up all that proprietary technology that they have invested heavily into for years and go with someone else to supply their chips, or continue trying to fabricate them themselves? While they are in the autonomous driving space with mobileye I believe, don't count on Tesla using that. Tesla had a split with mobil eye and uses their own technology with lidar. AI, data center, and personal computing with the EPYC and Ryzen AMD is dominating Intel. Even Nvidia, AMD's competitor, uses AMD's EPYC for datacenter processors which should say something about how good AMD's hardware is. Lisa Su, the CEO of AMD, turned this company around in matter of 5 years and she told us she has a plan. She has a Bachelors, Masters, and PhD in electrical engineering from MIT. I would put my money on her and be closer to short intel than to buy it. I know your video was more about the PEG ratio rather than what is going on in the companies but I just left this comment after I saw a bunch of people leaving comments saying they want to buy Intel now (one of them has 45 likes).
Isn't that why AMD growth rate is 10 times more and still if that's the case Intel stock is a better option? Both companies are in business since late 1960s, during first 50 years Intel completely dominated AMD but did not kick out of business. Next 50 or 10 or 5 or 3 years AMD can grow faster but to surpass Intel will be close to impossible. Also, AMDs grout rate is 10 times more, and still their stock is overvalued compared to Intel. Again, Intel always had better chips, but AMD was still doing just fine. Right now AMD has better chips, and Intel should be OK, but since all the time dominated competition can use its experience and finances to turn around the situation.
@@arrrryyy AMD has a few advantages in the current market but they might fizzle out soon. You keep hearing that AMD has 7 nm and Intel doesn't, but you barely hear that Intel's transistor density is +50% higher than AMD's (100 vs 66 MTr/mm²). Intel is and has always been more robust in Windows and most apps, but you barely hear about this one as well. There's a lot of negative vibe towards Intel in the past year...most people got emotional and took it personally when Intel increased prices and delivered small performance increments with each generation and we can see the repercussions now. As the market, some of these feelings can go full circle. I like AMD a lot but if I had to pick one stock now, I'd pick Intel ...even if their revenue is 10 times as large, they're the underdog when you look at sentiment.
@@arrrryyy "Intel SHOULD BE OK" 😂😂😂
A-Ramis not necessarily. It isn’t unheard of for companies like intel to fall behind and stay behind for a LONG time
Horia M you can have great technology overall but bad leadership can tank you. I think this is the case with intel, bad leadership and continuing bungling even though their technology suite is acceptable
Hey, Jimmy, would you mind explaining where the EXPECTED GROWTH % is from? I get it's a estimate but how is it calculated.
I found it from Bloomberg where they estimated EPS going out the next few years. I just took those numbers and calculated the compounded annual growth rate
@@LearntoInvest so....it.s intel a buy now or not? Thank you for the answer.
Jimmy - i would love for you to do another video on Intel given the disastrous quarter they have had. I have been following your channel for a while now.. I watched this when you did the video after the Q2 2020 results.. (I am long term bullish on the stock - like you i think fair value is in the region of $75)
I have increased my position in Intel, but having reviewed the numbers this weekend for Q3 along with the problems that they are having in the fab and profit margins, i would be keen to get your views as the numbers have me a bit worried. I have personally decided to put a hold in the position.
Maybe you could make a video after AMD announces their Q3 2020 results as the comparison on the profit margins and growth would provide a better picture of their enterprise business and why the drop has been so significant.
I know you hold Intel shares, so I think it would be a great personal motivation for you to do a video. Your advice and guidance is like gold here on CZcams...
He listened to you :-)
Hey Jimmy, How do you see NVDIA??
Jimmy this is great. Could you please do one for a Pharmerceuticals and maybe a Solar company.
it is April 2022, Intel is 48.12 and AMD is 106.82, so in 2 years Intel did not move and AMD rose 40%
At the end P/E and PEG did not help us pick the right investment back in Aug 2020 :-)
Thanks jimmy I just bought some intel. I’ve been watching it last week or so.
Great video. Thank you for explaining PEG’s. VERY INFORMATIVE !!
Nice explanation, thanks
Awesome lesson 👍 thank you Jimmy 🙂
Intel looks like a buy right now
i bought! looks like a no brainer at these prices
Sure they are buying it too. Companies will love when there stocks go on sale
That it does! I bought some Tuesday, and if it goes down to $45 I plan on improving my position.
@@StockOverflow that's exactly my plan.
Totally agreed. Market is just judging intel for their chips not for their other business they bought recently and with such a high value in the market.
These ratios show past results, the deciding factor would be the server market.
Great explanation of PEG ratio. Thank you
Glad I found your channel. Great stuff
Thanks for the explanation but I'm worried that companies like Apple, Microsoft and Sony all avoided Intel. In this current market, the Intel product price to performance ratio is deteriorating. Intel needs to build a more consumer-friendly priced product if they want to pull back their share.
I think places like hospitals, power plants, and ect will use a lot of intel still.
Very useful info .. thanks for the clear explanation using relevant examples.
If I remember correctly you are supposed to factor in the dividend as in eps growth + Dividend
Why would you do that?
very good analysis and explanation, greetings from Argentina
Thank you for this video! I learned a lot. It was very clear and I understand now how to read the PEG ratio. I am from Brazil and I invest in USA. You are helping a lot of people!! Keeping doing your great videos! Best regards from Brazil! God bless!
It's critical to remember that the growth we are talking about is the earnings growth per share, because growth in itself isn't a reason to paye an higher price since it can be capital consuming and therfore the compagny can be forced to sell more shares (especially if the compagny is fast growing but not very profitable, as it is often the case). A booming compagny can actually have low EPS growth and a stable cashflowing compagny doing buybacks can actually have an higher EPS growth.
You're awesome, Jimmy. Keeping on doing great vids
I just love all your videos man. Great job!
Learned something new. Thanks Jimmy!
Very good videos you make. Thank you for sharing 👍
Thanks jimmy for posting more videos
This is the best investment channel I have found so far. Really appreciate all the valuable information I have received from you already.
With the PEG ratio, it's PE / EPS Growth. EPS Growth is typically maybe estimated growth over the next year (let's say) correct? So if we're estimating EPS Growth outlook over the next year, does it also make sense to estimate the PE over the next year as well in the PEG Ratio? I guess what I'm asking is why would we could current PE ratio and divide that by expected growth percentage over the next year? If we're estimating EPS growth it seems like we'd also use a future outlook for PE ratio as well? Maybe pick 12 month out into the future and look at estimated market price and EPS? Does that make sense at all or no?
Hey Jimmy
Was wondering about if you could do this type of valuation when you value a company.
Like 2-4 other companies in same sector / industry some times it could be hard i now. But like this AMD and intel maybe even nvidia there too. Just like a quick and dirty peg, pe, growth rate what they do who's doing what and so on, not a deep dive but a toe in the water kinda thing :D. Value Lockheed with northrop grumman, L3harris, maybe even Raytheon and general dynamics.
AT&T with verizon and tmobile kinda sector specific tear down :D Maybe that would force too add companies too a list you wouldn't think about normally.
I can´t believe your video has only 31 views!!!!, thanks for your content.
Thank you for the the education Jimmy!
I will be digging in deeper on Intel. I like what I see on Return On Equity and Return On Invested Capitol. And it looks like the WACC is about 4%.
I don’t fully understand the business and the industry so I’m going to have to read the 10k and do some research so see if I can understand enough for me to invest in them.
Intel is a solid investment. It has the EPS of Netflix.
Excellent video
Great video Jimmy.
초보자도 잘 이해할수있게 설명을 잘하시네요 정말 궁금하던점이 확실히 정리됨
Thx for the video! Very usefull.
Peter lynch adds the dividends ratio to growth rate ...
This will make make PEG more effective.
Okay but where can you find the growth rate that we using to divide the top number by? That’s my main concern
Great channel lots of great contents. I’m watching none stop
Would you be able to do a video about gold and your thoughts on it? Also if so, what stocks or etf's would you recommend? I've heard alot of talk about how it's going higher and would love your opinion. Thanks! Btw love your videos and I keep up with them religiously, just wanted to say I appreciate you taking the time to make them.
You can't eat gold! 😳
@@vcash1112 ??? Don't know what that means but I'll keep that in mind.
Thanks, Professor Jimmy :). you clearly know what you were talking. Very educational yet practically useful.
Hi thx for the video
Can u do som on IBM and the split that the company attend to make
Using the same logic... Some electric car company sold half a car last year and this year it sold 10 cars. WOW that's like 2000% growth!!! So we take that PE and divide by 2000! Watch out Toyota!
Where do you find the growth rate % to do our own calculation? Thank you.
Just a question, towards the end of the video , at around @5:45 it says Intel is riskier. So is it right to take away from this that "Lower the peg ratio, riskier would the investment be?" Or does it mean something else when he says Intel is riskier investment?
Hello Jimmy.
PEG Ration have big flaw it is based on an assumption of future growth that is never certain.
"In the business world, the rearview mirror is always clearer than the windshield." Warren Buffett
"The biggest mistake investors make is looking backward at performance and thinking it’ll recur in the future." John Bogle
“Most people seem to think outstanding performance to date presages outstanding future performance. Actually, it’s more likely that outstanding performance to date has borrowed from the future and thus presages subpar performance from here on out.” Howard Marks
Second PEG Ration flaw is a company that grows fast and spends all its money on growth.
Example Amazon:
"This focus on consistent, increasing profitability created meaningful problems for me in trying to understand rapidly growing businesses like Amazon (AMZN), which seemingly never made any money but whose share price was constantly racing higher year after year. Strong reinvestment into Marketing and R&D suppressed profits but couldn't mask the strong cash generation that was just being reinvested back into the business."
PEG Ration is just a tool in the tool box that should not be used alone.
Man with a Hammer Syndrome:
Warren Buffett: Well, I think partly because it is so simple that the academics, for example, focus on all kinds of variables. Partly because academic professors.
Reporter: Right, yeah. The data in Business School?
Warren Buffett: Sure. That and the data is there so they focus on whether if you buy stocks on Tuesday and sell them on Friday you’re better off or if you buy them in election years and sell them in other years you’re better off. Or if you buy small companies. There are all these variables because the data are there and they learn how to manipulate data and as a friend of mine says - “to a man with a hammer everything looks like a nail” and once you have these skills, you just are dying to utilize them in some way. But they aren’t important. If I were being asked to participate in a business opportunity, would it make any difference to me whether I bought it on a Tuesday or Saturday or an election year? It’s not what a businessman thinks about in buying businesses so when I think about it when buying stocks because stocks are just pieces of a business.
Thanks Jimmy
Clean and truly Valueable Content. Thank you Jimmy
Hi Jimmy, where did you obtain those growth figures? thank you
Thanks for the great explanation! 😊👍🏼
Key word here is “expected.” Rule number one is never lose money. Intel is going to be there with its big cash flow even when it probably won't grow much. On the other hand, AMD may or may not grow at that heavy level. If it will, good for investors. But if not... So thanks but no thanks. I'll stick to INTC, at least until PER change or something. Anyway, thank you for the info!
I get where you’re coming from, I really do.
However, Intel has been screwing up very very very badly. They literally have no cards in their hand, so your argument doesn’t really hold this time. They won’t “not grow much”. They’re actually going to shrink, and I see no way around it. Let’s get back to this comment in a year or two and see what happens!
@@TCPUDPATM We'll see! ;)
Play safe u get less return
Great explanation!!📈🤑
Omg I love this video, one of the best channels out there
As usual, great analysis! Much Thanks!
Thanks for educating Jimmy unlike most other channel that are mostly just info dump!!!
Keep these awesome vids coming!!!!!
Hi, Thanks for the video i have one question lets say a company whose earning per share is 10 and p/e is 20 (CMP is 200) and profit growth for last 3 year is 20 so as per peg ratio it is fare value right, but if a company is growing by 20% i.e in next year its earning will be 12 rupees and it will take around 10 to 15 year just to return my investment amount so why should we invest in it?
You always go above and beyond jimmy! Thanks for the video
+1 if you are here after the -10% drop and you have the opportunity to buy at a discount
Hi Jimmy. Can you make a video analyzing Intel after their Q3 results?
Great analysis.... It appears a management turnover is needed at INtEL BECAUSE AMD IS RUN BY A ENGINEER AND INTEL IS RUN BY FINANCE MBA'S... LOOKS LIKE INTEL NEEDS AN ENGINEER AS PRESIDENT. I watched an interview of the Intel president .... not impressed. Lisa SU, engineer CEO at AMD is very inspiring. I am long Intel 65 shares....
Agreed. Intel management seem like a bunch of bean counters. Whenever the execs are composed of a bunch of people who are concerned with just the financial results and numbers it often spells trouble. If people in charge actually know the product itself and concentrate on that, then the financials tend to take care of themselves. People who focus too much on the end result and not enough on the process and operations can be toxic to a company. That said, I still think Intel is a good value and that they may easily turn things around.
Thanks for the vids Jimmy.. I've stocks in my watchlist with a peg ratio = 0.. Is that also a sign of undervalue? Thanks
Thanks for posting!
Thank you for all your hard work. I have made some moves thanks to you. Will be looking to add more Intel. Came in from your new Intel video. 👍👍
Still a fanboy of Intel. IMO the price drop was a bit overreaction, they are still a huge and profitable company. On the other hand, AMD is having good runs consistently, but if they will face just a minor problem, they will in turn have huge difficulties keeping the current price of the stock.
I think that people are not getting the bigger picture on Intel. While AMD is mainly focused in computer semiconductors and graphic cards, Intel is literally everywhere. Competing on laptop and computer market but also a major player in IOT software, Data Center building structures, Wireless, Network connection competing with Cisco, Energy efficiency, memory... I mean guys, just enter AMD website, see what they have on offer and then go to Intel's one. Intel is a massively great opportunity at the moment, plus chips are cyclical, who knows where AMD will be in 3 years, who knows if there will be any disruptive technology by then. If your strategy is buy low sell high, great time to buy Intel
Why yahoo finance shows these numbers -1? For example 1,6, instead of 2,6 ?
Is there any relation between perpetuity formula (P=E/(r-g)) and the PEG ratio? I wonder how they find it and is there any concept or proof to it?
the problem is how you estimate the next 4 years growth rate?
Silly question:
When you explain the P/E ratio: "for every dollar we pay the company earns 9 dollar"... during what period? Quarter or a year?
Year
Hi Jimmy, is PEG or P/E more reliable metric when looking to buy a stock 🤔
I’d argue that any metric that has an additional characteristic (an example, PEG ratio is the PE ratio plus expected growth) might be more reliable because it attempts to get a better idea of future performance. For that alone I’d say that PEG is more “reliable”, even though Jimmy does say that at the end of the day, it is a matter of opinion/circumstance on which company you think is going to do better when they have similar PEG ratios.
There is a pretty good chance the entire market is over price right now, especially the QQQs.
That being said, I think the growth potential of AMD is significant considering not only is Intel delaying 7nm but it has been struggling to meet demand. To take a term from Buffet, it’s moat is eroding and AMD is storming the castle. The growth in Laptops and servers is a huge deal because they are growing good faith and support from the OEM manufacturers such as HP, Lenovo and Dell. If Intel doesn’t get to 7nm til 2022 AMD could more than double it’s current market share. Intel needs to hit a home run and hit it soon.
You need to treat AMD as a completely different company since the advent of the Ryzen architecture, nothing prior to that has any bearing on it’s future.
They still need to prove themselves in the GPU department, but the leaks (grain of salt) for GPU performance indicate that Navi 2x might be a GPU product equivalent of Ryzen. If that happens, there will be a new sheriff in Silicon Valley!
Hi Jimmy, appreciate your video on the analysis. May i request for you to do an in-depth analysis on AMD? Thank you
Intel essentially can't design any worthy chips on their own. If it wasn't for enterprise/larger customers just buying them out of habit*(or whatever word you want to use there) they would be shrinking yoy until they come out with a new chip. They should loose the server segment though. Thanks for the analysis. Good stuff.
You a gamer?
@@valueking2283 I use to be a gamer. I am a sw engineer.
How could we derive the growth rate?
Can you do a stock analysis of AMD or TSMC?
How do you value Tesla, Amazon now ?
TY!
My morning dose of neuron. Absolutely underrated channel 🙏🙏🙏
Thx
Might be worth say 9.6 is how many years it takes to break even
Hmm.. according to zacks, Exp EPS Growth (3-5yr) for Intel is 7.50% and their PEG ratio today is at 1.13. Also according to zacks, last time Intel's PEG ratio was less then 1, was Late 2013 (at ~$20/share at that time)
Do this for Qualcomm please!!
Excellent explanation.
Although expected growth is useful, you have to remember that it is speculative and they have to follow through with this.
Hi Jimmy! You read my mind. Been looking to invest in Intel. Thanks and love your content
You got my like 👌