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

In the latest trading session, Applied Materials (AMAT) closed at $62.77, marking a +0.95% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.78%. Meanwhile, the Dow gained 0.68%, and the Nasdaq, a tech-heavy index, added 1.44%.

Prior to today's trading, shares of the maker of chipmaking equipment had gained 4% over the past month. This has lagged the Computer and Technology sector's gain of 4.97% and outpaced the S&P 500's loss of 1.32% in that time.

AMAT will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMAT to post earnings of $0.95 per share. This would mark year-over-year growth of 28.38%. Our most recent consensus estimate is calling for quarterly revenue 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.

Any recent changes to analyst estimates for AMAT should also be noted by investors. Recent revisions tend to reflect the latest 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. 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.

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 is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, AMAT is currently trading at a Forward P/E ratio of 16.3. This represents a discount compared to its industry's average Forward P/E of 20.65.

Investors should also note that AMAT has a PEG ratio of 1.2 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 1.49 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 197, which puts it in the bottom 23% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research