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Applied Materials (AMAT) Outpaces Stock Market Gains: What You Should Know

Applied Materials (AMAT) closed the most recent trading day at $65.01, moving +1.06% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.72%. Elsewhere, the Dow gained 0.89%, while the tech-heavy Nasdaq added 1.47%.

Prior to today's trading, shares of the maker of chipmaking equipment had gained 5.46% over the past month. This has lagged the Computer and Technology sector's gain of 7.08% and the S&P 500's gain of 5.85% in that time.

Wall Street will be looking for positivity from AMAT as it approaches its next earnings report date. This is expected to be August 13, 2020. The company is expected to report EPS of $0.94, up 27.03% from the prior-year quarter. 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 should also note any recent changes to analyst estimates for AMAT. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMAT is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, AMAT is holding a Forward P/E ratio of 16.87. This represents a discount compared to its industry's average Forward P/E of 22.35.

Investors should also note that AMAT has a PEG ratio of 1.24 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 industry currently had an average PEG ratio of 1.62 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 59, putting it in the top 24% 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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