Applied Materials (AMAT) Gains As Market Dips: What You Should Know
In the latest trading session, Applied Materials (AMAT) closed at $113.95, marking a +0.85% move from the previous day. This move outpaced the S&P 500's daily loss of 0.02%. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq added 5.44%.
Prior to today's trading, shares of the maker of chipmaking equipment had gained 18.51% over the past month. This has outpaced the Computer and Technology sector's gain of 11.1% and the S&P 500's gain of 4.57% in that time.
Applied Materials will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.93, up 2.12% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.69 billion, up 6.62% from the year-ago period.
AMAT's full-year Zacks Consensus Estimates are calling for earnings of $6.73 per share and revenue of $24.16 billion. These results would represent year-over-year changes of -12.6% and -6.29%, respectively.
Any recent changes to analyst estimates for Applied Materials should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. The Zacks Consensus EPS estimate has moved 1.6% lower within the past month. Applied Materials is currently a Zacks Rank #3 (Hold).
Digging into valuation, Applied Materials currently has a Forward P/E ratio of 16.8. This represents a discount compared to its industry's average Forward P/E of 17.43.
It is also worth noting that AMAT currently has a PEG ratio of 2.45. 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 1.99 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 52, putting it in the top 21% 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.
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