Applied Materials (AMAT) closed at $231.33 in the latest trading session, marking a +1.13% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 1.23%. Elsewhere, the Dow gained 0.72%, while the tech-heavy Nasdaq added 1.86%.
Shares of the maker of chipmaking equipment have appreciated by 12.18% over the course of the past month, outperforming the Computer and Technology sector's gain of 3.49%, and the S&P 500's gain of 2.45%.
The upcoming earnings release of Applied Materials will be of great interest to investors. In that report, analysts expect Applied Materials to post earnings of $2.11 per share. This would mark a year-over-year decline of 9.05%. Our most recent consensus estimate is calling for quarterly revenue of $6.7 billion, down 4.84% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $9.36 per share and a revenue of $28.27 billion, signifying shifts of +8.21% and +4.03%, respectively, from the last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Applied Materials. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.11% downward. Applied Materials is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, Applied Materials is holding a Forward P/E ratio of 24.43. This represents a discount compared to its industry average Forward P/E of 40.99.
We can additionally observe that AMAT currently boasts a PEG ratio of 2.86. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Electronics - Semiconductors industry held an average PEG ratio of 1.95.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 68, placing it within the top 28% of over 250 industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the 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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