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

Applied Materials (AMAT) closed the most recent trading day at $107.83, moving -1.63% from the previous trading session. This move lagged the S&P 500's daily loss of 0.12%. Meanwhile, the Dow gained 0.09%, and the Nasdaq, a tech-heavy index, added 0.4%.

Heading into today, shares of the maker of chipmaking equipment had gained 20.21% over the past month, outpacing the Computer and Technology sector's gain of 10.34% and the S&P 500's gain of 8.25% in that time.

Wall Street will be looking for positivity from Applied Materials as it approaches its next earnings report date. This is expected to be August 18, 2022. On that day, Applied Materials is projected to report earnings of $1.78 per share, which would represent a year-over-year decline of 6.32%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.26 billion, up 1.01% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.42 per share and revenue of $25.43 billion. These totals would mark changes of +8.48% and +10.28%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Applied Materials. These revisions help to show the ever-changing nature of near-term business trends. 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.96% lower. Applied Materials is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Applied Materials has a Forward P/E ratio of 14.78 right now. Its industry sports an average Forward P/E of 16.23, so we one might conclude that Applied Materials is trading at a discount comparatively.

Also, we should mention that AMAT has a PEG ratio of 1.78. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.77 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 180, putting it in the bottom 29% 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.

To follow AMAT in the coming trading sessions, be sure to utilize Zacks.com.

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