Earnings Update: Applied Materials, Inc. (NASDAQ:AMAT) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts

Shareholders might have noticed that Applied Materials, Inc. (NASDAQ:AMAT) filed its quarterly result this time last week. The early response was not positive, with shares down 2.5% to US$203 in the past week. Applied Materials reported US$6.8b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.05 beat expectations, being 3.1% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Applied Materials

Taking into account the latest results, the most recent consensus for Applied Materials from 32 analysts is for revenues of US$30.3b in 2025. If met, it would imply a decent 13% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 6.6% to US$9.63. In the lead-up to this report, the analysts had been modelling revenues of US$30.1b and earnings per share (EPS) of US$9.57 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$240, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Applied Materials at US$280 per share, while the most bearish prices it at US$193. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Applied Materials' revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Applied Materials.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Applied Materials' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$240, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Applied Materials going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Applied Materials , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.