Applied Materials (AMAT) Gains As Market Dips: What You Should Know

Applied Materials (AMAT) closed at $135.58 in the latest trading session, marking a +1.95% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.15%. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 0.05%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 16.69% over the past month. This has lagged the Computer and Technology sector's loss of 14.1% and the S&P 500's loss of 7.66% in that time.

Investors will be hoping for strength from Applied Materials as it approaches its next earnings release. The company is expected to report EPS of $1.85, up 33.09% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.16 billion, up 19.41% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.13 per share and revenue of $26.54 billion, which would represent changes of +18.86% and +15.06%, respectively, from the prior year.

Any recent changes to analyst estimates for Applied Materials 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% higher. Applied Materials currently has a Zacks Rank of #2 (Buy).

In terms of valuation, Applied Materials is currently trading at a Forward P/E ratio of 16.35. This valuation marks a discount compared to its industry's average Forward P/E of 16.73.

Meanwhile, AMAT's PEG ratio is currently 1.39. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Semiconductor Equipment - Wafer Fabrication industry currently had an average PEG ratio of 1.39 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 20, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many 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.