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

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Applied Materials (AMAT - Free Report) closed at $33.43 in the latest trading session, marking a -0.77% move from the prior day. This move lagged the S&P 500's daily loss of 0.59%. At the same time, the Dow lost 0.35%, and the tech-heavy Nasdaq lost 0.88%.

Coming into today, shares of the maker of chipmaking equipment had lost 13.37% in the past month. In that same time, the Computer and Technology sector lost 5.44%, while the S&P 500 lost 4.1%.

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. In that report, analysts expect AMAT to post earnings of $0.96 per share. This would mark year-over-year growth of 3.23%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4 billion, up 0.85% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $4.45 per share and revenue of $17.24 billion. These results would represent year-over-year changes of +36.92% and +18.61%, respectively.

Investors should also note any recent changes to analyst estimates for AMAT. These recent revisions tend to reflect the evolving nature of short-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.

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 remained stagnant. AMAT is currently a Zacks Rank #3 (Hold).

Looking at its valuation, AMAT is holding a Forward P/E ratio of 7.57. This represents a discount compared to its industry's average Forward P/E of 9.91.

Meanwhile, AMAT's PEG ratio is currently 0.69. 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 0.99 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 31, putting it in the top 12% 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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