The moat score of 91 points to a business with a durable competitive position, and a management score of 75 reflects reasonable capital discipline against a low debt to equity ratio of 0.1x. Yet return on invested capital sits at just 5.4% and free cash flow yield at 1.9%, both modest relative to a gross margin of 49.5%, so the operating quality implied by the moat score is not yet showing up fully in returns on capital deployed.
The margin of safety score of 12 reflects a wide gap between the current price of $474.32 and the consensus buy price of $84.95, itself built from a margin of safety price of $58.50 and a 10-cap price of $53.81. The model applied a 15.0% growth assumption, well below the 29.0% actually measured historically, a deliberately conservative choice. Even with that caution built in, the current price to earnings ratio of 121.6x sits far above what the underlying cash generation and capital returns currently support.
| Price | $559.82 |
| Market cap | $912.8B |
| P/E ratio | 143.5x |
| Return on invested capital | 5.4% |
| Gross margin | 49.5% |
| Debt to equity | 0.07x |
| Free cash flow yield | 1.9% |
| Growth rate used | 15.0% |
| Growth rate measured | 29.0% |
| Exit multiple assumed | 30.0x |
| Company | Moat | Mgmt | Margin of safety |
|---|---|---|---|
| Micron Technology (MU) | 62 | 70 | 38 |
| Intel Corporation (INTC) | 24 | 39 | 0 |
| Broadcom Inc. (AVGO) | 99 | 98 | 33 |
| NVIDIA Corporation (NVDA) | 100 | 100 | 53 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Advanced Micro Devices rather than accepting ours.