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Applied Materials (AMAT) Outpaces Stock Market Gains: What You Should Know

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Applied Materials (AMAT - Free Report) closed the most recent trading day at $34.76, moving +1.34% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.45%. Meanwhile, the Dow gained 0.51%, and the Nasdaq, a tech-heavy index, added 0.42%.

Prior to today's trading, shares of the maker of chipmaking equipment had gained 0.29% over the past month. This has outpaced the Computer and Technology sector's loss of 0.69% and the S&P 500's loss of 1.64% in that time.

Investors will be hoping for strength from AMAT as it approaches its next earnings release, which is expected to be February 13, 2019. In that report, analysts expect AMAT to post earnings of $0.79 per share. This would mark a year-over-year decline of 25.47%. Meanwhile, our latest consensus estimate is calling for revenue of $3.72 billion, down 11.57% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.46 per share and revenue of $15.45 billion. These totals would mark changes of -22.25% and -10.47%, respectively, from last year.

Any recent changes to analyst estimates for AMAT should also be noted by investors. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 2.18% lower. 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 9.91 right now. Its industry sports an average Forward P/E of 10.21, so we one might conclude that AMAT is trading at a discount comparatively.

Investors should also note that AMAT has a PEG ratio of 1.15 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 1.05 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 107, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AMAT in the coming trading sessions, be sure to utilize Zacks.com.




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