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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 $42.63, moving +0.46% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.21%. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the maker of chipmaking equipment had gained 11.45% over the past month. This has outpaced the Computer and Technology sector's gain of 5.1% and the S&P 500's gain of 2.57% in that time.

Investors will be hoping for strength from AMAT as it approaches its next earnings release. The company is expected to report EPS of $0.66, down 45.9% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.48 billion, down 23.9% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $2.94 per share and revenue of $14.50 billion. These results would represent year-over-year changes of -33.93% and -15.97%, respectively.

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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 1.43% lower within the past month. AMAT is currently sporting a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that AMAT has a Forward P/E ratio of 14.44 right now. Its industry sports an average Forward P/E of 14.71, so we one might conclude that AMAT is trading at a discount comparatively.

Investors should also note that AMAT has a PEG ratio of 1.68 right now. 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 1.41 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 225, which puts it in the bottom 12% 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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