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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 at $46.33 in the latest trading session, marking a +1.91% move from the prior day. This change outpaced the S&P 500's 1.3% gain on the day. At the same time, the Dow added 1.21%, and the tech-heavy Nasdaq gained 1.39%.

Coming into today, shares of the maker of chipmaking equipment had gained 4.63% in the past month. In that same time, the Computer and Technology sector lost 4.48%, while the S&P 500 lost 4.84%.

Wall Street will be looking for positivity from AMAT as it approaches its next earnings report date. This is expected to be August 15, 2019. The company is expected to report EPS of $0.70, down 41.67% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.53 billion, down 21.08% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $2.96 per share and revenue of $14.47 billion. These results would represent year-over-year changes of -33.48% and -16.16%, respectively.

Investors should also note any recent changes to analyst estimates for AMAT. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.4% lower. AMAT is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, AMAT currently has a Forward P/E ratio of 15.34. This valuation marks a discount compared to its industry's average Forward P/E of 21.37.

Also, we should mention that AMAT has a PEG ratio of 2.3. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 2.24 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 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.

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


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