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Applied Materials (AMAT) Dips More Than Broader Markets: What You Should Know

Applied Materials (AMAT) closed the most recent trading day at $62.30, moving -1.13% from the previous trading session. This move lagged the S&P 500's daily loss of 0.65%. At the same time, the Dow lost 0.77%, and the tech-heavy Nasdaq lost 1.27%.

Coming into today, shares of the maker of chipmaking equipment had gained 6.69% in the past month. In that same time, the Computer and Technology sector gained 7.86%, while the S&P 500 gained 7.76%.

Investors will be hoping for strength from AMAT as it approaches its next earnings release. The company is expected to report EPS of $0.95, up 28.38% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.20 billion, up 17.81% from the prior-year quarter.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $3.81 per share and revenue of $16.67 billion. These results would represent year-over-year changes of +25.33% and +14.1%, respectively.

It is also important to note the recent changes to analyst estimates for AMAT. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 past month, the Zacks Consensus EPS estimate remained stagnant. AMAT currently has a Zacks Rank of #4 (Sell).

In terms of valuation, AMAT is currently trading at a Forward P/E ratio of 16.52. This represents a discount compared to its industry's average Forward P/E of 21.96.

Investors should also note that AMAT has a PEG ratio of 1.21 right now. 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. The Semiconductor Equipment - Wafer Fabrication was holding an average PEG ratio of 1.63 at yesterday's closing price.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 63, which puts it in the top 25% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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