Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Applied Materials (AMAT - Free Report) closed at $141.92, marking a +0.66% move from the previous day. This change outpaced the S&P 500's 0.03% gain on the day.

Heading into today, shares of the maker of chipmaking equipment had gained 2.07% over the past month, lagging the Computer and Technology sector's gain of 6.22% and the S&P 500's gain of 2.12% in that time.

AMAT will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.76, up 66.04% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.92 billion, up 34.7% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $6.53 per share and revenue of $22.65 billion. These results would represent year-over-year changes of +56.59% and +31.67%, respectively.

Any recent changes to analyst estimates for AMAT should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMAT is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, AMAT currently has a Forward P/E ratio of 21.6. This valuation marks a discount compared to its industry's average Forward P/E of 22.91.

Also, we should mention that AMAT has a PEG ratio of 1.2. 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 industry currently had an average PEG ratio of 1.2 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 84, which puts it in the top 34% 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.

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


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Applied Materials, Inc. (AMAT) - free report >>

Published in