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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 $63.80 in the latest trading session, marking a +1.25% move from the prior day. This move outpaced the S&P 500's daily gain of 1.13%. At the same time, the Dow added 1.68%, and the tech-heavy Nasdaq gained 0.43%.

Coming into today, shares of the maker of chipmaking equipment had gained 2.26% in the past month. In that same time, the Computer and Technology sector gained 5.2%, while the S&P 500 gained 2.1%.

AMAT will be looking to display strength as it nears its next earnings release, which is expected to be February 12, 2020. The company is expected to report EPS of $0.92, up 13.58% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.12 billion, up 9.79% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.81 per share and revenue of $16.79 billion. These totals would mark changes of +25.33% and +14.94%, respectively, from last year.

Any recent changes to analyst estimates for AMAT should also be noted by investors. These revisions help to show the ever-changing nature of near-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.

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 0.85% higher. AMAT currently has a Zacks Rank of #1 (Strong Buy).

Investors should also note AMAT's current valuation metrics, including its Forward P/E ratio of 16.56. This valuation marks a discount compared to its industry's average Forward P/E of 20.65.

We can also see that AMAT currently has a PEG ratio of 2.02. 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 2.02 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 13, putting it in the top 6% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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