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Applied Materials (AMAT) Gains As Market Dips: What You Should Know

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Applied Materials (AMAT) closed at $88.73 in the latest trading session, marking a +0.12% move from the prior day. This move outpaced the S&P 500's daily loss of 0.92%. Elsewhere, the Dow lost 0.62%, while the tech-heavy Nasdaq added 0.05%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 7.99% over the past month. This has lagged the Computer and Technology sector's loss of 0.73% and the S&P 500's loss of 1% in that time.

Wall Street will be looking for positivity from Applied Materials as it approaches its next earnings report date. On that day, Applied Materials is projected to report earnings of $1.78 per share, which would represent a year-over-year decline of 6.32%. Meanwhile, our latest consensus estimate is calling for revenue of $6.26 billion, up 0.99% from the prior-year quarter.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $7.49 per share and revenue of $25.46 billion. These results would represent year-over-year changes of +9.5% and +10.4%, respectively.

Investors might also notice recent changes to analyst estimates for Applied Materials. 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.

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 0.02% lower. Applied Materials is holding a Zacks Rank of #5 (Strong Sell) right now.

Digging into valuation, Applied Materials currently has a Forward P/E ratio of 11.83. For comparison, its industry has an average Forward P/E of 12.96, which means Applied Materials is trading at a discount to the group.

We can also see that AMAT currently has a PEG ratio of 1.42. 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 industry currently had an average PEG ratio of 1.42 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 242, which puts it in the bottom 4% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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