Applied Materials (AMAT) Outpaces Stock Market Gains: What You Should Know
In the latest trading session, Applied Materials (AMAT) closed at $62.54, marking a +1.67% move from the previous day. This change outpaced the S&P 500's 1.34% gain on the day. Meanwhile, the Dow gained 2.13%, and the Nasdaq, a tech-heavy index, added 0.94%.
Heading into today, shares of the maker of chipmaking equipment had gained 7.82% over the past month, outpacing the Computer and Technology sector's gain of 7.45% and the S&P 500's gain of 3.92% in that time.
Investors will be hoping for strength from AMAT as it approaches its next earnings release. On that day, AMAT is projected to report earnings of $0.95 per share, which would represent year-over-year growth of 28.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.20 billion, up 17.81% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.81 per share and revenue of $16.67 billion. These totals would mark changes of +25.33% and +14.1%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for AMAT. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. The Zacks Consensus EPS estimate remained stagnant within the past month. AMAT currently has a Zacks Rank of #3 (Hold).
Investors should also note AMAT's current valuation metrics, including its Forward P/E ratio of 16.13. For comparison, its industry has an average Forward P/E of 21.04, which means AMAT is trading at a discount to the group.
Investors should also note that AMAT has a PEG ratio of 1.19 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. AMAT's industry had an average PEG ratio of 1.54 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 53, putting it in the top 21% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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.