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Applied Materials (AMAT) Stock Sinks As Market Gains: What You Should Know
Applied Materials (AMAT - Free Report) closed at $118.87 in the latest trading session, marking a -0.55% move from the prior day. This change lagged the S&P 500's daily gain of 0.17%. Elsewhere, the Dow gained 0.6%, while the tech-heavy Nasdaq added 0.67%.
Prior to today's trading, shares of the maker of chipmaking equipment had gained 7.38% over the past month. This has lagged the Computer and Technology sector's gain of 8.4% and outpaced the S&P 500's gain of 0.25% in that time.
Wall Street will be looking for positivity from Applied Materials as it approaches its next earnings report date. On that day, Applied Materials is projected to report earnings of $1.84 per share, which would represent a year-over-year decline of 0.54%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.4 billion, up 2.42% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.01 per share and revenue of $24.56 billion. These totals would mark changes of -8.96% and -4.76%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Applied Materials. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
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. Within the past 30 days, our consensus EPS projection has moved 0.36% higher. Applied Materials is currently a Zacks Rank #3 (Hold).
Digging into valuation, Applied Materials currently has a Forward P/E ratio of 17.06. This valuation marks a discount compared to its industry's average Forward P/E of 18.83.
Also, we should mention that AMAT has a PEG ratio of 3.05. 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. AMAT's industry had an average PEG ratio of 3.05 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 226, which puts it in the bottom 11% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.