Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Applied Materials (AMAT - Free Report) closed at $113.29, marking a +1.01% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.7%. Meanwhile, the Dow lost 0.8%, and the Nasdaq, a tech-heavy index, lost 1.82%.

Coming into today, shares of the maker of chipmaking equipment had lost 6.63% in the past month. In that same time, the Computer and Technology sector lost 1.16%, while the S&P 500 gained 0.39%.

Investors will be hoping for strength from Applied Materials as it approaches its next earnings release. The company is expected to report EPS of $1.84, down 0.54% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.4 billion, up 2.42% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $7.01 per share and revenue of $24.56 billion. These results would represent year-over-year changes of -8.96% and -4.76%, respectively.

Any recent changes to analyst estimates for Applied Materials 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. Applied Materials is currently a Zacks Rank #3 (Hold).

Investors should also note Applied Materials's current valuation metrics, including its Forward P/E ratio of 16. This represents a discount compared to its industry's average Forward P/E of 17.53.

Also, we should mention that AMAT has a PEG ratio of 2.86. 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 was holding an average PEG ratio of 2.86 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 118, which puts it in the top 47% 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.

You can find more information on all of these metrics, and much more, on

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