In the latest trading session, Applied Materials (AMAT - Free Report) closed at $63.51, marking a -0.73% move from the previous day. This move lagged the S&P 500's daily loss of 0.15%. Elsewhere, the Dow lost 0.07%, while the tech-heavy Nasdaq lost 0.47%.
Heading into today, shares of the maker of chipmaking equipment had gained 13.3% over the past month, outpacing the Computer and Technology sector's gain of 6.24% and the S&P 500's gain of 3.19% in that time.
AMAT will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMAT to post earnings of $1.17 per share. This would mark year-over-year growth of 46.25%. Meanwhile, our latest consensus estimate is calling for revenue of $4.60 billion, up 22.65% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.08 per share and revenue of $17.11 billion. These totals would mark changes of +34.21% and +17.15%, respectively, from last year.
Any recent changes to analyst estimates for AMAT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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. The Zacks Consensus EPS estimate has moved 0.2% higher within the past month. AMAT currently has a Zacks Rank of #3 (Hold).
In terms of valuation, AMAT is currently trading at a Forward P/E ratio of 15.7. For comparison, its industry has an average Forward P/E of 17.36, which means AMAT is trading at a discount to the group.
We can also see that AMAT currently has a PEG ratio of 1.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication was holding an average PEG ratio of 1.37 at yesterday's closing price.
The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 63, putting it in the top 25% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.