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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 the most recent trading day at $142.01, moving +1.49% from the previous trading session. This change outpaced the S&P 500's 0.18% loss on the day.

Coming into today, shares of the maker of chipmaking equipment had gained 1.28% in the past month. In that same time, the Computer and Technology sector gained 3.16%, while the S&P 500 gained 2.44%.

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 $1.76 per share, which would represent year-over-year growth of 66.04%. Our most recent consensus estimate is calling for quarterly revenue of $5.92 billion, up 34.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.55 per share and revenue of $22.65 billion. These totals would mark changes of +57.07% and +31.67%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for AMAT. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. AMAT is currently sporting a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that AMAT has a Forward P/E ratio of 21.37 right now. This valuation marks a premium compared to its industry's average Forward P/E of 20.32.

Investors should also note that AMAT has a PEG ratio of 1.19 right now. 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. AMAT's industry had an average PEG ratio of 1.19 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 70, which puts it in the top 28% 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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