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Applied Materials (AMAT) Stock Sinks As Market Gains: Here's Why

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The latest trading session saw Applied Materials (AMAT - Free Report) ending at $205.57, denoting a -0.44% adjustment from its last day's close. This change lagged the S&P 500's daily gain of 0.08%. Elsewhere, the Dow saw a downswing of 0.12%, while the tech-heavy Nasdaq appreciated by 0.07%.

Coming into today, shares of the maker of chipmaking equipment had lost 12.51% in the past month. In that same time, the Computer and Technology sector lost 4.62%, while the S&P 500 lost 0.21%.

The upcoming earnings release of Applied Materials will be of great interest to investors. The company's earnings report is expected on August 15, 2024. On that day, Applied Materials is projected to report earnings of $2.01 per share, which would represent year-over-year growth of 5.79%. Simultaneously, our latest consensus estimate expects the revenue to be $6.67 billion, showing a 3.8% escalation compared to the year-ago quarter.

AMAT's full-year Zacks Consensus Estimates are calling for earnings of $8.33 per share and revenue of $26.91 billion. These results would represent year-over-year changes of +3.48% and +1.48%, respectively.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Applied Materials. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. As of now, Applied Materials holds a Zacks Rank of #2 (Buy).

Investors should also note Applied Materials's current valuation metrics, including its Forward P/E ratio of 24.79. Its industry sports an average Forward P/E of 29.46, so one might conclude that Applied Materials is trading at a discount comparatively.

Meanwhile, AMAT's PEG ratio is currently 2.57. 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. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 2.58 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 206, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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