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

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In the latest trading session, Applied Materials (AMAT - Free Report) closed at $136.17, marking a +0.72% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.23%. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq lost 0.09%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 5.14% over the past month. This has lagged the Computer and Technology sector's loss of 1.69% and the S&P 500's loss of 1.43% in that time.

Wall Street will be looking for positivity from Applied Materials as it approaches its next earnings report date. On that day, Applied Materials is projected to report earnings of $1.98 per share, which would represent a year-over-year decline of 2.46%. Meanwhile, our latest consensus estimate is calling for revenue of $6.52 billion, down 3.33% from the prior-year quarter.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $7.90 per share and revenue of $26.32 billion. These results would represent year-over-year changes of +2.6% and +2.07%, respectively.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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 has moved 1.42% higher within the past month. Applied Materials is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, Applied Materials is currently trading at a Forward P/E ratio of 17.11. This represents a discount compared to its industry's average Forward P/E of 21.91.

Meanwhile, AMAT's PEG ratio is currently 2.81. 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. AMAT's industry had an average PEG ratio of 2.81 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 31, putting it in the top 13% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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