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Applied Materials (AMAT) Gains As Market Dips: What You Should Know

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Applied Materials (AMAT - Free Report) closed at $44.47 in the latest trading session, marking a +1.46% move from the prior day. This change outpaced the S&P 500's 0.22% loss on the day. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 0.23%.

Coming into today, shares of the maker of chipmaking equipment had gained 10.6% in the past month. In that same time, the Computer and Technology sector gained 6.02%, while the S&P 500 gained 4.87%.

Investors will be hoping for strength from AMAT as it approaches its next earnings release, which is expected to be May 16, 2019. In that report, analysts expect AMAT to post earnings of $0.66 per share. This would mark a year-over-year decline of 45.9%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.48 billion, down 23.9% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $2.94 per share and revenue of $14.50 billion. These results would represent year-over-year changes of -33.93% and -15.97%, respectively.

It is also important to note the recent changes to analyst estimates for AMAT. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMAT is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that AMAT has a Forward P/E ratio of 14.92 right now. Its industry sports an average Forward P/E of 14.92, so we one might conclude that AMAT is trading at a no noticeable deviation comparatively.

We can also see that AMAT currently has a PEG ratio of 1.84. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.48 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 50, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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