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

Zacks Equity Research

Applied Materials (AMAT) closed at $52.14 in the latest trading session, marking a +1.12% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 0.09%, and the Nasdaq, a tech-heavy index, added 0.4%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 1.02% over the past month. This has lagged the Computer and Technology sector's gain of 0.51% and the S&P 500's loss of 0.14% in that time.

AMAT will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMAT to post earnings of $0.76 per share. This would mark a year-over-year decline of 21.65%. Our most recent consensus estimate is calling for quarterly revenue of $3.69 billion, down 8.08% from the year-ago period.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $3 per share and revenue of $14.53 billion. These results would represent year-over-year changes of -32.58% and -15.8%, 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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMAT is currently a Zacks Rank #3 (Hold).

Investors should also note AMAT's current valuation metrics, including its Forward P/E ratio of 17.2. This represents a discount compared to its industry's average Forward P/E of 22.08.

Meanwhile, AMAT's PEG ratio is currently 3.44. 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 2.62 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 24, which puts it in the top 10% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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