Applied Materials (AMAT) ended the recent trading session at $194.99, demonstrating a +2.21% change from the preceding day's closing price. The stock's performance was ahead of the S&P 500's daily loss of 0.07%. On the other hand, the Dow registered a loss of 0.37%, and the technology-centric Nasdaq increased by 0.03%.
Prior to today's trading, shares of the maker of chipmaking equipment had gained 12.36% outpaced the Computer and Technology sector's gain of 5.58% and the S&P 500's gain of 3.94%.
The investment community will be closely monitoring the performance of Applied Materials in its forthcoming earnings report. On that day, Applied Materials is projected to report earnings of $2.34 per share, which would represent year-over-year growth of 10.38%. Meanwhile, the latest consensus estimate predicts the revenue to be $7.2 billion, indicating a 6.23% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.47 per share and revenue of $28.82 billion. These totals would mark changes of +9.48% and +6.04%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Applied Materials. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.03% increase. Currently, Applied Materials is carrying a Zacks Rank of #3 (Hold).
Investors should also note Applied Materials's current valuation metrics, including its Forward P/E ratio of 20.14. This indicates a discount in contrast to its industry's Forward P/E of 27.61.
We can additionally observe that AMAT currently boasts a PEG ratio of 2.12. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Electronics - Semiconductors industry held an average PEG ratio of 1.62.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 35% 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.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming 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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