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Applied Materials (AMAT) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Applied Materials (AMAT) closed at $129.44, marking a +1.59% move from the previous day. This move outpaced the S&P 500's daily gain of 0.81%. At the same time, the Dow added 0.3%, and the tech-heavy Nasdaq gained 0.37%.

Heading into today, shares of the maker of chipmaking equipment had gained 1.33% over the past month, lagging the Computer and Technology sector's gain of 4.13% and the S&P 500's gain of 5.64% 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 $1.90 per share, which would represent year-over-year growth of 16.56%. Meanwhile, our latest consensus estimate is calling for revenue of $6.35 billion, up 13.78% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.06 per share and revenue of $26.46 billion, which would represent changes of +17.84% and +14.73%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Applied Materials. 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 the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.08% lower. Applied Materials is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Applied Materials is currently trading at a Forward P/E ratio of 15.81. For comparison, its industry has an average Forward P/E of 16.49, which means Applied Materials is trading at a discount to the group.

We can also see that AMAT currently has a PEG ratio of 1.4. 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. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 1.4 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 112, putting it in the top 45% 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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