Applied Materials Inc (NASDAQ:AMAT) received a lot of attention from a substantial price movement on the NasdaqGS in the over the last few months, increasing to $58.8 at one point, and dropping to the lows of $45.75. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Applied Materials’s current trading price of $49.55 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Applied Materials’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Applied Materials
Is Applied Materials still cheap?Good news, investors! Applied Materials is still a bargain right now. According to my valuation, the intrinsic value for the stock is $63.77, but it is currently trading at US$49.55 on the share market, meaning that there is still an opportunity to buy now. However, given that Applied Materials’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Applied Materials generate?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 38.02% over the next couple of years, the future seems bright for Applied Materials. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since AMAT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on AMAT for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AMAT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Applied Materials. You can find everything you need to know about Applied Materials in the latest infographic research report. If you are no longer interested in Applied Materials, you can use our free platform to see my list of over 50 other stocks with a high growth potential.