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Applied Materials (AMAT) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Applied Materials (AMAT - Free Report) closed at $36.59, marking a -1.67% move from the previous day. This move lagged the S&P 500's daily loss of 0.04%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, lost 0.67%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 7.52% over the past month. This has lagged the Computer and Technology sector's loss of 1.53% and the S&P 500's gain of 0.02% in that time.

Wall Street will be looking for positivity from AMAT as it approaches its next earnings report date. This is expected to be November 15, 2018. On that day, AMAT is projected to report earnings of $0.96 per share, which would represent year-over-year growth of 3.23%. Our most recent consensus estimate is calling for quarterly revenue of $4 billion, up 0.85% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.45 per share and revenue of $17.24 billion. These totals would mark changes of +36.92% and +18.61%, 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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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 remained stagnant. AMAT is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that AMAT has a Forward P/E ratio of 8.37 right now. Its industry sports an average Forward P/E of 10.33, so we one might conclude that AMAT is trading at a discount comparatively.

Investors should also note that AMAT has a PEG ratio of 0.76 right now. 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. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.03 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 34, which puts it in the top 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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