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Applied Materials (AMAT) closed the latest trading day at $135.56, indicating a -1.39% change from the previous session's end. The stock's performance was ahead of the S&P 500's daily loss of 2.36%. Meanwhile, the Dow lost 2.48%, and the Nasdaq, a tech-heavy index, lost 2.55%.
Shares of the maker of chipmaking equipment have depreciated by 9.64% over the course of the past month, underperforming the Computer and Technology sector's loss of 8.4% and the S&P 500's loss of 5.6%.
The investment community will be closely monitoring the performance of Applied Materials in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $2.31, reflecting a 10.53% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $7.11 billion, indicating a 6.97% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.35 per share and revenue of $28.81 billion. These totals would mark changes of +8.09% and +6.01%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Applied Materials. 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 suggests that these changes in estimates have a direct relationship with upcoming 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.03% higher. Applied Materials presently features a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Applied Materials has a Forward P/E ratio of 14.7 right now. This valuation marks a discount compared to its industry's average Forward P/E of 19.3.
Also, we should mention that AMAT has a PEG ratio of 1.45. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Electronics - Semiconductors industry held an average PEG ratio of 1.31.