Applied Materials (AMAT - Free Report) closed at $50.02 in the latest trading session, marking a +0.24% move from the prior day. This move outpaced the S&P 500's daily loss of 1.23%. Elsewhere, the Dow lost 1.28%, while the tech-heavy Nasdaq lost 1.13%.
Prior to today's trading, shares of the maker of chipmaking equipment had gained 3.91% over the past month. This has outpaced the Computer and Technology sector's gain of 1.53% and the S&P 500's gain of 1.95% in that time.
AMAT will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMAT to post earnings of $0.76 per share. This would mark a year-over-year decline of 21.65%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.69 billion, down 8.08% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3 per share and revenue of $14.53 billion, which would represent changes of -32.58% and -15.8%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for AMAT. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMAT is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that AMAT has a Forward P/E ratio of 16.65 right now. For comparison, its industry has an average Forward P/E of 24.63, which means AMAT is trading at a discount to the group.
We can also see that AMAT currently has a PEG ratio of 3.33. 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. The Semiconductor Equipment - Wafer Fabrication was holding an average PEG ratio of 2.54 at yesterday's closing price.
The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 193, putting it in the bottom 25% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.