In the latest trading session, Applied Materials (AMAT - Free Report) closed at $42.17, marking a +0.38% move from the previous day. This change outpaced the S&P 500's 0.35% gain on the day. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq added 0.7%.
Heading into today, shares of the maker of chipmaking equipment had gained 8.52% over the past month, outpacing the Computer and Technology sector's gain of 6.69% and the S&P 500's gain of 5.14% in that time.
AMAT will be looking to display strength as it nears its next earnings release. On that day, AMAT is projected to report earnings of $0.66 per share, which would represent a year-over-year decline of 45.9%. Meanwhile, our latest consensus estimate is calling for revenue of $3.48 billion, down 23.9% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.94 per share and revenue of $14.50 billion, which would represent changes of -33.93% and -15.97%, respectively, from the prior 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.
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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMAT currently has a Zacks Rank of #4 (Sell).
Digging into valuation, AMAT currently has a Forward P/E ratio of 14.3. For comparison, its industry has an average Forward P/E of 14.48, which means AMAT is trading at a discount to the group.
Also, we should mention that AMAT has a PEG ratio of 1.66. 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. AMAT's industry had an average PEG ratio of 1.44 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 199, which puts it in the bottom 22% 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.