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

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Applied Materials (AMAT) closed at $124.69 in the latest trading session, marking a -6.21% move from the prior day. This change lagged the S&P 500's daily loss of 1.04%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 4.59% over the past month. This has lagged the Computer and Technology sector's gain of 3.67% and the S&P 500's gain of 3.83% in that time.

AMAT will be looking to display strength as it nears its next earnings release, which is expected to be May 20, 2021. In that report, analysts expect AMAT to post earnings of $1.50 per share. This would mark year-over-year growth of 68.54%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.39 billion, up 36.27% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $5.98 per share and revenue of $21.68 billion. These results would represent year-over-year changes of +43.41% and +26.01%, respectively.

Investors should also note any recent changes to analyst estimates for AMAT. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 0.03% lower. AMAT is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, AMAT is holding a Forward P/E ratio of 22.24. This valuation marks a discount compared to its industry's average Forward P/E of 22.93.

It is also worth noting that AMAT currently has a PEG ratio of 1.61. 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. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 1.46 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 5, putting it in the top 2% 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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