Applied Materials (AMAT) closed at $224.99 in the latest trading session, marking a -1.2% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.53%. Meanwhile, the Dow gained 0.52%, and the Nasdaq, a tech-heavy index, added 0.52%.
Coming into today, shares of the maker of chipmaking equipment had gained 20% in the past month. In that same time, the Computer and Technology sector gained 2.01%, while the S&P 500 gained 0.71%.
Market participants will be closely following the financial results of Applied Materials in its upcoming release. The company's upcoming EPS is projected at $2.11, signifying a 9.05% drop compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $6.7 billion, down 4.84% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.36 per share and revenue of $28.27 billion. These totals would mark changes of +8.21% and +4.03%, respectively, from last year.
Any recent changes to analyst estimates for Applied Materials should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 shifted 0.24% downward. Applied Materials currently has a Zacks Rank of #3 (Hold).
Investors should also note Applied Materials's current valuation metrics, including its Forward P/E ratio of 24.32. This expresses a discount compared to the average Forward P/E of 38.55 of its industry.
We can also see that AMAT currently has a PEG ratio of 2.85. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Electronics - Semiconductors industry held an average PEG ratio of 1.93.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 83, finds itself in the top 34% echelons 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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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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