On Thursday, Intel Corporation (NASDAQ: NASDAQ:INTC) shares faced a downturn following a disappointing quarterly report and a bleak outlook from the company. Mizuho highlighted concerns about Intel's recent performance and future expectations, specifically citing a revenue miss for the first quarter and a troubling guide for the second quarter.
The technology giant reported a smaller than anticipated revenue for Q1, achieving $13 billion against the expected $13.6 billion. While the gross margin (GM) slightly surpassed expectations, the forecast for Q2 GM fell short by 200 basis points, coming in at 43.5%.
The analyst from Mizuho expressed doubts about the company's ability to achieve the year-over-year gross margin expansion it guided for, which is meant to align with consensus estimates.
Investors were particularly troubled by the guidance for the upcoming quarter, which the analyst described as "terrible and much worse than expected." This outlook suggests that Intel has yet to find its footing after a significant year-to-date decline in stock value and investor sentiment.
Despite Intel's optimism about new products on the horizon, the analyst believes that the negative guidance will overshadow any positive narrative from the CEO regarding upcoming innovations. The analyst also predicted that the stock is unlikely to attract buyers at this juncture and anticipates that the share price could bottom out in the low $30s.
As Intel grapples with these challenges, market participants will closely monitor the company's performance in the coming months, especially in light of the analyst's concerns about the potential for a "hockey stick ramp" in gross margins that investors may find overly optimistic.
InvestingPro Insights
Amidst the recent downturn for Intel Corporation (NASDAQ: INTC), real-time data and insights from InvestingPro provide a more nuanced picture of the company's position. With a current market capitalization of $149.46 billion, Intel is trading at a high earnings multiple with a P/E ratio of 87.2, suggesting a premium valuation compared to earnings.
Despite a year-over-year revenue decline of 14%, the company has seen a quarterly revenue growth of 9.71%, indicating some resilience in its financial performance.
InvestingPro Tips highlight a mixed sentiment: Intel is expected to see net income growth this year, with analysts predicting profitability. Moreover, the stock's Relative Strength Index (RSI) suggests it is in oversold territory, which could signal a potential rebound. Still, investors should note that the stock has performed poorly over the last month, with a 17.52% decrease in total return.
For those considering an investment in Intel or seeking more comprehensive analysis, there are additional InvestingPro Tips available. With these insights, investors can better understand Intel's market position and future outlook. To gain access to these valuable tips and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.