What the hell is going on with amd the company that used to be an insult when you had it amd pc people would laugh at you. In fact it happened to me. I thought my parents didn't love me enough. What's going on so, first of all what you're seeing on the screen right now this is the excel spreadsheet.

I have that's available for every single patreon channel member to look at my performance and you have some good companies, some bad companies, things that screw it up things like that right and one of the things i actually got right so far. It's amd, md is number 38 right here and, as you can see on march 4th we posted the video. The share price was 80. My target price was 117.

Current price is 110. Now you have to remember that over the weekend we sow 120 dollars. This thing went ballistic and i didn't sell i'll show you why i think, there's a good reason not to sell yet there was definitely a lot of hype. When you have this massive news, new financials, a lot of hype, it jumps up and down it's volatile, but i'm not going to sell out of it just because there's a lot of speculation playing around with it.

So let me show you a few things right here. We already did 38 of this. We still have six percent more based on the current number, but i'll raise it to 125, and you see the new upside in a second just want to show this little file. Let's move on okay, so the first thing we're going to examine is what other qualified analysts are saying about amd.

So this is from tape, ranks i've sorted it by five star analysts only and, as you can see, there's a lot of mixed opinions about this company right here we have buy, hold hold, hold, buy. Some are saying: downside, downside, downside some are saying 18 or even 36 upside there's a lot of divergence of opinions here and if you look at the actual price of tip ranks it's going to be 110, which is the exact same price. They have right now. I actually think that this can go higher and, as you can see, i don't always follow what the pranks is saying.

In this case, i actually think that they're short selling the company a little bit, not literally figuratively. Let me show you why. So, let's look at the fundamentals and the first thing we got to start with is the profitability look at their margins? 45. You have to remember that this is a company that actually makes physical stuff.

It's a lot, but look at this. This is more impressive. 21, ebitda 25.76 net income margin. This is monopoly numbers.

This is extremely high. This is why everybody's gaga over this company, but hold on there's more. But if you thought that's cool, let me show you the growth numbers, because this is insane look at this growth revenue. Growth 75 next year, still on track to 39 ebay to growth 152 next year 65.

This is insane look at this leverage free cash low growth year over year. Can you see this 226 0.65? This is monopoly numbers all over again. This company has one of the best financials and margins and growth rates i've ever seen. However, as you might know, nothing in life is perfect.

Neither is this company. Now the company in itself is phenomenal. The question is the price. The price isn't amazing.

Look, this company did 41 and 3.7 over the past three months so 41 over the course of three months. That is a lot now. I said that i think the target price was 117, but i thought, like end of this year, maybe end of next year. I had no idea they're gon na do this in three months.

This is kind of indicative of a bubble. Now, obviously it doesn't really matter now. This price is definitely inflated. It's fused by a lot of reddit by a lot of meme stocks by a lot of speculation.

So it's definitely going overboard. But the question is: can the company justify this in the long run as time goes by and these people are wheeled out out of the company, and i think that the answer is yes. Let me show you why now i do want you to go and go over the financials by yourself and do your own research as always, but i want you to pay attention. Of course they grew the revenue.

Everybody knows that they went from nine and a half million to 13.5 million in revenues. That's nice, but i want you to look at this trend right here. This is the ebitda okay, look at this ebitda and let's go back so this year they did 2.9 billion trading 12 months last year, 1.6, the year before the 2019 853. The year before that 621, the year before the 271.

These years have covered no 17. 18. 19 there's no covered in 17, 18 19, so they went from 271 621 853 in three years that had nothing to do with covert now. Obviously, this stock definitely enjoyed the crisis.

Obviously, but this stock was doing fine way before covered. Look at this ebitda growth. They literally 10x their ebitda from 2017 to today in four years now this is tesla level numbers you have to give them a little respect. Put some respect to the name, give them some clout now, based on what i'm about to show you right now, some of you may call me crazy.

Look at their multiple song p gap. Look at this 38, almost 39. Look at this eevee sales, 9.78. 160.

Over value, look at this evie ebitda, one of my favorites next year, the forward, not the current. Sixteen point: eight. Ninety seven percent of the value look at this price to sales current twelve months. Nine point: ninety five 132 percent of the value everywhere you look here apart from just a few outliers.

This company is insanely overvalued according to these multiples, but hang on a second, because i'm about to show you why these multiples are wrong and fundamentals actually justify a 125 price. Hang on to your seats, say hello to my little friend: oh, this is the eps earnings per share. Look at this. They beat it you through cue through q3 2020.

They beat it q4 2020. They beat it q121 one. They beat it q2 2021. Four quarters in a row they're, beating expectations and trust me expectations for amd are sky high.

This is tesla level expectations and still quarter quarter, quarter, quarter, they're, beating the estimates so to say that this company has no chance to hit these multiples. He's kind of betting against elon i mean i don't want to bench against elon. I don't want to bear against md, but hold on i'll show you that this year hang on hang on this, isn't it and now it's time for the this year, the thing you've all been waiting for, but before we get started a few important disclaimers now the Thing with the company like amd is the fact that it's a phenomenal company, everybody knows it, it's really good great products, great margin, great growth, everything is phenomenal. Question is not whether how good the company is, but rather how good the price is, and this is why we're going to run the gcf and see if we can justify any price higher than 117 dollars, which is my previous target price.

Let's get started so first of all on the screen right now: you're, seeing the very simplified dcf that i've made for this company. As you can see right here, i've assumed an ebitda of 2.9 billion dollars by the end of this year, and i've applied a 45 growth onwards 45 per year, all the way to 2026, where i assumed an insane 18.6 billion dollars of ebitda 18.6 billion of ebitda. That's a lot: that's not a conservative assumption, but in the case of amd it makes sense, but you need to understand that we're maxing everything out to see if we can justify a higher price. So this is kind of a best case scenario.

So the other thing i showed here is the after tax dollars. Now, as you can see right here, this would be the earnings when you remove depreciation amortization. Dna depreciation motivation is essentially the same thing. It's how much value you're losing by having your stuff become older and older, like a car, that's appreciating, but depreciation is for physical assets.

Amortization is for intangibles like works of art, whatever right so know-how ip. What not so dna is basically gets removed from the ebitda, and this is the amount that the tax is applied on 21 tax is my assumption. Now a lot of you will get on my case saying well tom. This should be 28, i mean buy.

This is going to raise it well, just look at the effective tax rate. This company is paying. I guarantee it's much lower than 21, so using 21 we're still being conservative, that's how we get the after tax dollars right here. These are the after tax dollars.

Basically, for each year, we're taking out the tax - and this is the after tax dollars - we're also taking out capex capex - are capital expenditures, essentially how much money you're spending to build new factories, new production lines, basically investing in your business. So if i've assumed 5.7 billion dollars of capex investments for the next five to six years, also, this is the net working capital changes. You can google that essentially that's the difference between your net current assets, net current liabilities and the change per year. You can pretty much google that and then we have the holy grail.

This line right here, fcf free cash flow. So this is the number we're going to be working with. We have a 10 discount rate right here now. I've did a video and it's on our patreon explaining how to do this all yourself and essentially how to calculate your own 10 or 12 or 8 percent.

So there's a whole video on patreon and for channel numbers explaining how to calculate the discount rate, but in this video you just have to trust me. It's 10 10 discount rate per year, and this is what we have as the present value sum now. I've applied a four percent, perpetual growth rate and i got 142 billion dollars in valuation based on the perpetual approach. Now i've also used a 12 multiplier, essentially multiplying this 2026 ebitda by 12, giving me 160 billion dollars now the reason you're, seeing that this is a little bit different from this one is because these are completely different methods and they should never be used together.

But i the crazy russian that i am i like to blend these and now the thing you've been waiting for what it means for the share price check it out so 117 dollars. This is the perpetual approach right here. 132. This is the ebay approach right here.

The average is 125 dollars hold on a second 125 now car share price is 110, giving us 12.7 under valuation. So that means that, for me, the target price is 125 for this company. What the hell am i doing with my backboard 125 for amd? I know this is supposed to be on the other side, but i'm russian, so 125 dollars card price is 110 1200. I'm staying in i'll, see you at 125..

Now here's the thing a lot of you will say: well tom you're over optimistic. How can you assume a 45 growth rate for this company? You have to understand that amd not only outperforming intel by the way in itself, a very good investment, because it's so damn cheap. It's not only outperforming intel. It's definitely sitting on the best locations to be in they're, basically in the gaming industry they're in the data center industry they're in the pc industry in the bitcoin cryptocurrency industry.

Everywhere i mean this is a company that's sitting on the best industries to be in right. Now, in fact, i think that 45 might be a little low for them. I think they might over perform. But again i don't have to make that decision until the stock crosses 125, which it will.

I have no doubt about it now, as always. I hope you enjoyed this video if you did make sure you share it with somebody that needs to know this, otherwise just go and have fun. It's been a pleasure, a shout out to the channel members and the patrons. I hope we had better audio this time than before.

You guys are amazing. If you want to sign up five bucks per month, the link is gon na be below you'll, be supporting the channel. I mean we have to buy these little toys like the screen right here, so i can actually make a better video for you. I'm just kidding.

It's all gucci i'll see you next video tomorrow.