In the latest trading session, Applied Materials (AMAT) closed at $38.70, marking a -1.25% move from the previous day. This change lagged the S&P 500's 0.79% loss on the day. At the same time, the Dow lost 0.85%, and the tech-heavy Nasdaq lost 1.11%.
Prior to today's trading, shares of the maker of chipmaking equipment had gained 24.22% over the past month. This has outpaced the Computer and Technology sector's gain of 12.9% and the S&P 500's gain of 13.44% in that time.
Investors will be hoping for strength from AMAT as it approaches its nex t earnings release, which is expected to be February 13, 2019. The company is expected to report EPS of $0.79, down 25.47% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.72 billion, down 11.57% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.39 per share and revenue of $15.30 billion, which would represent changes of -23.82% and -11.32%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for AMAT. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. Within the past 30 days, our consensus EPS projection has moved 1.92% lower. AMAT is currently a Zacks Rank #3 (Hold).
Looking at its valuation, AMAT is holding a Forward P/E ratio of 11.55. For comparison, its industry has an average Forward P/E of 11.9, which means AMAT is trading at a discount to the group.
It is also worth noting that AMAT currently has a PEG ratio of 1.34. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMAT's industry had an average PEG ratio of 1.24 as of yesterday's close.
The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank includes is listed in order 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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