Applied Materials (AMAT) Gains But Lags Market: What You Should Know

·3-min read

In the latest trading session, Applied Materials (AMAT) closed at $133.05, marking a +1.39% move from the previous day. This change lagged the S&P 500's 1.4% gain on the day.

Coming into today, shares of the maker of chipmaking equipment had gained 2% in the past month. In that same time, the Computer and Technology sector gained 7.26%, while the S&P 500 gained 1.07%.

Wall Street will be looking for positivity from AMAT as it approaches its next earnings report date. The company is expected to report EPS of $1.76, up 66.04% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.92 billion, up 34.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.53 per share and revenue of $22.65 billion. These totals would mark changes of +56.59% and +31.67%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AMAT. These revisions help to show the ever-changing nature of 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. Within the past 30 days, our consensus EPS projection has moved 8.74% higher. AMAT is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, AMAT is currently trading at a Forward P/E ratio of 20.11. Its industry sports an average Forward P/E of 21.53, so we one might conclude that AMAT is trading at a discount comparatively.

Also, we should mention that AMAT has a PEG ratio of 1.12. 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. AMAT's industry had an average PEG ratio of 1.12 as of yesterday's close.

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