Applied Materials (AMAT) closed at $256.41 in the latest trading session, marking a +1.15% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.88%. Meanwhile, the Dow gained 0.38%, and the Nasdaq, a tech-heavy index, added 1.31%.
Shares of the maker of chipmaking equipment have appreciated by 15.11% over the course of the past month, outperforming the Computer and Technology sector's gain of 1.49%, and the S&P 500's gain of 2.48%.
Market participants will be closely following the financial results of Applied Materials in its upcoming release. It is anticipated that the company will report an EPS of $2.21, marking a 7.14% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $6.86 billion, down 4.34% from the prior-year quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $9.54 per share and a revenue of $28.94 billion, indicating changes of +1.27% and +2%, respectively, from the former year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Applied Materials. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 moved 0.38% higher. Applied Materials is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, Applied Materials is holding a Forward P/E ratio of 26.57. Its industry sports an average Forward P/E of 34.11, so one might conclude that Applied Materials is trading at a discount comparatively.
We can also see that AMAT currently has a PEG ratio of 2.63. 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 1.9 at the close of the market yesterday.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 91, placing it within the top 37% of over 250 industries.
The Zacks Industry Rank is ordered 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.
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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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