It’s been a tough earnings season for tech stocks. However, few tech stocks can hold a candle to Intel’s (NASDAQ:INTC) horrendous post-earnings price performance. Trading in the mid-$30s per share as recently as a month ago, Intel stock fell by more than 26% right after a poorly-received earnings release and other negative developments.

Since then, the chip maker’s shares have continued to drift lower. As of this writing, shares are now at sub-$20 per share prices, levels not seen since well over a decade ago. With this steep decline in a matter of weeks, while most in the market are staying a way, a few may be thinking that a value opportunity is emerging.

Yet while INTC may be far cheaper than before, make no mistake. Although cheap according to some valuation metrics, in other ways shares remain overvalued. At least, given the latest adjustments to guidance and sell-side forecasts. While not certain, this may leave the stock vulnerable to a further pullback, if challenges continue to mount.

Intel Stock: A Quadruple Whammy of Disappointment

To say Intel disappointed investors with its latest quarterly results is a mild way of putting it. As announced post-market on Aug. 1, the company’s revenue and earnings for the quarter ending June 30, 2024 fell far short of already-walked back expectations.

Quarterly revenue, which was down nearly 1% year-over-year, missed forecasts by around $150 million. Even worse, non-GAAP earnings for the quarter came in at 2 cents per share, missing forecasts by 8 cents per share. That’s not all. The chip maker unveiled some other negative news, which resulted in a quadruple whammy of disappointment.

In turn, leading to Intel stock immediately losing more than a quarter of its value. That is, alongside horrendous earnings, Intel also reported lackluster guidance for the current quarter. Analysts were expecting revenue of $14.4 billion this quarter, but management says that Intel’s top line will come in between $12.5 billion and $13.5 billion.

The company also suspended its dividend, as well as announced layoffs impacting 15,000 employees. These latter two announcements strongly suggest greater uncertainty regarding Intel’s turnaround efforts, which include its big chip foundry gamble as well as its plans to capitalize on the AI chips trend.

Cheap in Some Ways, but Not Necessarily a Bargain

With its dramatic drop in price, you may now think that Intel stock has fallen into deep value territory. However, a closer look suggests that is not quite the case. Yes, with its recent move to sub-$20 per share prices, INTC now trades for just around its tangible book value.

However, based on other valuation metrics, Intel is not necessarily a bargain. For instance, following the latest results and updated guidance, analysts anticipate INTC’s earnings per share (EPS) will come in at just 27 cents this year. This means shares sport a forward price-to-earnings (P/E) multiple of 72.4.

Although the sell-side expects a major earnings rebound in 2025, to $1.26 per share, INTC trades for around 15.3 times this 2025 forecast. Given the uncertainty, a more discounted valuation may be warranted. After all, as Kiplinger commentator John Miley recently argued, Intel’s market share losses have worsened since the start of the AI chips boom.

Also, the latest tweaks to the company’s turnaround plan could impact future growth, and place Intel under greater regulatory scrutiny. As things continue going from bad to worse, it’s easy to see INTC becoming a cheap stock that becomes even cheaper.

Even if Bullish, Steer Clear for Now, and Wait for Lower Prices

Investors buying Intel at less than $20 per share may be thinking they are buying the dip, but pretty soon they could realize all they’ve done is catch a falling knife. That is, further pessimism about the company and its future prospects may lead to further moderate-to-high price declines.

Yes, Intel’s tangible book value may help to mitigate further declines, but keep in mind that this metric is subject to change. For instance, net losses could lower this figure. Hence, while there’s possibly still a big potential payoff for investors willing to wait for the turnaround to take shape, consider it best not to rush into such a wager.

Between now, and when the company begins to demonstrate success with its efforts to capitalize on the AI chips trend, as well as become a major third-party chip foundry, shares could hit new multi-decade lows. With this, even if you’re bullish on an Intel stock comeback, sit tight for lower prices.