Applied Materials (AMAT) closed at $217.51 in the latest trading session, marking a +2.81% move from the prior day. The stock's performance was ahead of the S&P 500's daily gain of 0.58%.
Shares of the maker of chipmaking equipment have appreciated by 29.39% over the course of the past month, outperforming the Computer and Technology sector's gain of 6.37%, and the S&P 500's gain of 3.68%.
Analysts and investors alike will be keeping a close eye on the performance of Applied Materials in its upcoming earnings disclosure. On that day, Applied Materials is projected to report earnings of $2.12 per share, which would represent a year-over-year decline of 8.62%. Simultaneously, our latest consensus estimate expects the revenue to be $6.7 billion, showing a 4.84% drop compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.37 per share and revenue of $28.27 billion. These totals would mark changes of +8.32% and +4.03%, respectively, from last year.
Any recent changes to analyst estimates for Applied Materials should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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 has shifted 0.19% downward. Applied Materials presently features a Zacks Rank of #4 (Sell).
Looking at its valuation, Applied Materials is holding a Forward P/E ratio of 22.58. This represents a discount compared to its industry average Forward P/E of 37.7.
Also, we should mention that AMAT has a PEG ratio of 2.77. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Electronics - Semiconductors industry stood at 1.97 at the close of the market yesterday.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 150, putting it in the bottom 40% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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Applied Materials, Inc. (AMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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