Back to top

Image: Bigstock

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

Read MoreHide Full Article

Applied Materials (AMAT - Free Report) closed the most recent trading day at $97.61, moving +0.26% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.3%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, lost 0.11%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 18.51% over the past month. This has lagged the Computer and Technology sector's gain of 3.24% and the S&P 500's loss of 0.62% in that time.

Investors will be hoping for strength from Applied Materials as it approaches its next earnings release. On that day, Applied Materials is projected to report earnings of $1.80 per share, which would represent a year-over-year decline of 5.26%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.26 billion, up 1.01% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.49 per share and revenue of $25.47 billion, which would represent changes of +9.5% and +10.44%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Applied Materials. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.58% lower. Applied Materials is currently sporting a Zacks Rank of #5 (Strong Sell).

Looking at its valuation, Applied Materials is holding a Forward P/E ratio of 12.99. This represents a discount compared to its industry's average Forward P/E of 14.2.

Also, we should mention that AMAT has a PEG ratio of 1.46. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.46 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 241, which puts it in the bottom 5% 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.


See More Zacks Research for These Tickers


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


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

Published in