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

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In the latest trading session, Applied Materials (AMAT - Free Report) closed at $87.50, marking a -1.19% move from the previous day. This move lagged the S&P 500's daily gain of 0.58%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 0.84%.

Coming into today, shares of the maker of chipmaking equipment had gained 16.96% in the past month. In that same time, the Computer and Technology sector gained 5.17%, while the S&P 500 gained 2.12%.

Wall Street will be looking for positivity from AMAT as it approaches its next earnings report date. On that day, AMAT is projected to report earnings of $1.26 per share, which would represent year-over-year growth of 28.57%. Meanwhile, our latest consensus estimate is calling for revenue of $4.95 billion, up 19% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.95 per share and revenue of $19.67 billion, which would represent changes of +18.71% and +14.35%, respectively, from the prior year.

Any recent changes to analyst estimates for AMAT should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AMAT is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note AMAT's current valuation metrics, including its Forward P/E ratio of 17.87. This represents a discount compared to its industry's average Forward P/E of 20.86.

Investors should also note that AMAT has a PEG ratio of 1.81 right now. 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 1.81 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 43, putting it in the top 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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