July 15, 2024


It's the Technology

Applied Materials (AMAT) Dips More Than Broader Markets: What You Should Know

Applied Materials (AMAT) closed at $62.11 in the latest trading session, marking a -0.24% move from the prior day. This change lagged the S&P 500’s daily loss of 0.22%. At the same time, the Dow lost 0.35%, and the tech-heavy Nasdaq lost 0.28%.

Prior to today’s trading, shares of the maker of chipmaking equipment had gained 7.55% over the past month. This has outpaced the Computer and Technology sector’s gain of 7.13% and the S&P 500’s gain of 3.82% 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 $1.17, up 46.25% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.60 billion, up 22.65% from the year-ago period.

AMAT’s full-year Zacks Consensus Estimates are calling for earnings of $4.08 per share and revenue of $17.11 billion. These results would represent year-over-year changes of +34.21% and +17.15%, respectively.

Investors should also note any recent changes to analyst estimates for AMAT. 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 iPhone repair the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 0.2% higher. AMAT is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note AMAT’s current valuation metrics, including its Forward P/E ratio of 15.27. For comparison, its industry has an average Forward P/E of 17.16, which means AMAT is trading at a discount to the group.

Meanwhile, AMAT’s PEG ratio is currently 1.21. 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 1.33 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 65, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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Applied Materials, Inc. (AMAT) : Free Stock Analysis Report

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