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

In the latest market close, Applied Materials (AMAT) reached $235.41, with a -1.91% movement compared to the previous day. This change lagged the S&P 500's daily loss of 0.16%. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq lost 0.18%.

Prior to today's trading, shares of the maker of chipmaking equipment had gained 10.11% over the past month. This has outpaced the Computer and Technology sector's gain of 6.77% and the S&P 500's gain of 3.15% in that time.

The investment community will be paying close attention to the earnings performance of Applied Materials in its upcoming release. It is anticipated that the company will report an EPS of $2.01, marking a 5.79% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $6.67 billion, up 3.8% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $8.31 per share and a revenue of $26.89 billion, representing changes of +3.23% and +1.4%, respectively, from the prior year.

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Investors might also notice recent changes to analyst estimates for Applied Materials. 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 demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.07% lower. Applied Materials is holding a Zacks Rank of #3 (Hold) right now.

In the context of valuation, Applied Materials is at present trading with a Forward P/E ratio of 28.88. This indicates a discount in contrast to its industry's Forward P/E of 34.45.

We can also see that AMAT currently has a PEG ratio of 3.14. 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. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 3.4 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 191, positioning it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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Applied Materials, Inc. (AMAT) : Free Stock Analysis Report

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