Applied Materials (NasdaqGS:AMAT) - Share price, News & Analysis

AMAT fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	5/6
Financial Health	6/6
Dividends	4/6

AMAT Stock Overview

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries.

Rewards

Trading at 40.3% below our estimate of its fair value

Earnings are forecast to grow 6.65% per year

Earnings have grown 16.4% per year over the past 5 years

Risk Analysis

No risks detected for AMAT from our risk checks.

Applied Materials Competitors

Lam Research

NasdaqGS:LRCX

US$67.0b

MKS Instruments

NasdaqGS:MKSI

US$6.6b

Onto Innovation

NYSE:ONTO

US$3.7b

Nova

NasdaqGS:NVMI

US$2.9b

Price History & Performance

Summary of all time highs, changes and price drops for Applied Materials
Historical stock prices
Current Share Price	US$109.93
52 Week High	US$167.06
52 Week Low	US$101.33
Beta	1.44
1 Month Change	-2.54%
3 Month Change	-15.61%
1 Year Change	-18.32%
3 Year Change	178.30%
5 Year Change	141.60%
Change since IPO	23,953.07%

Recent News & Updates

May 19

We Think Applied Materials (NASDAQ:AMAT) Can Manage Its Debt With Ease

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

May 18

Applied Materials Stock: The Sell-Off Might Not Be Over

Applied Materials will post its FQ2 earnings report on May 19. Semi investors have become skittish over macro concerns and a potential industry downturn. Despite its highly robust FCF yields, AMAT stock has fallen 30% from its January highs. Therefore, we believe that the market has been digesting the industry's massive 2020 surge. Our price action analysis suggests a massive bull trap occurred in January 2022. Moreover, a series of critical resistance zones have formed. We revise our rating from Buy to Hold, given AMAT's weaker technical outlook, impacting its risk/reward profile.

Shareholder Returns

	AMAT	US Semiconductor	US Market
7D	-0.5%	-1.2%	-0.5%
1Y	-18.3%	-3.7%	-12.3%

Return vs Industry: AMAT underperformed the US Semiconductor industry which returned -1.9% over the past year.

Return vs Market: AMAT underperformed the US Market which returned -12.9% over the past year.

Price Volatility

Is AMAT's price volatile compared to industry and market?
AMAT volatility
AMAT Average Weekly Movement	7.1%
Semiconductor Industry Average Movement	8.6%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	2.9%

Stable Share Price: AMAT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: AMAT's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1967	30,100	Gary Dickerson	https://www.appliedmaterials.com

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits.

Applied Materials Fundamentals Summary

How do Applied Materials's earnings and revenue compare to its market cap?
AMAT fundamental statistics
Market Cap	US$97.11b
Earnings (TTM)	US$6.76b
Revenue (TTM)	US$24.84b

14.4x

P/E Ratio

3.9x

P/S Ratio

Is AMAT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AMAT income statement (TTM)
Revenue	US$24.84b
Cost of Revenue	US$13.04b
Gross Profit	US$11.80b
Other Expenses	US$5.04b
Earnings	US$6.76b

Last Reported Earnings

May 01, 2022

Next Earnings Date

Aug 18, 2022

Earnings per share (EPS)	7.65
Gross Margin	47.50%
Net Profit Margin	27.20%
Debt/Equity Ratio	47.1%

How did AMAT perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

13%

Payout Ratio

Does AMAT pay a reliable dividends?

See AMAT dividend history and benchmarks

When do you need to buy AMAT by to receive an upcoming dividend?
Applied Materials dividend dates
Ex Dividend Date	May 25 2022
Dividend Pay Date	Jun 16 2022
Days until Ex dividend	0 days
Days until Dividend pay date	22 days

Does AMAT pay a reliable dividends?

See AMAT dividend history and benchmarks

Valuation

Is Applied Materials undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

40.3%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: AMAT ($109.93) is trading below our estimate of fair value ($184.14)

Significantly Below Fair Value: AMAT is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: AMAT is good value based on its PE Ratio (14.4x) compared to the US Semiconductor industry average (19.8x).

PE vs Market: AMAT is good value based on its PE Ratio (14.4x) compared to the US market (15.1x).

Price to Earnings Growth Ratio

PEG Ratio: AMAT is poor value based on its PEG Ratio (2.2x)

Price to Book Ratio

PB vs Industry: AMAT is overvalued based on its PB Ratio (8.4x) compared to the US Semiconductor industry average (3.5x).

Future Growth

How is Applied Materials forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AMAT's forecast earnings growth (6.7% per year) is above the savings rate (1.9%).

Earnings vs Market: AMAT's earnings (6.7% per year) are forecast to grow slower than the US market (12.5% per year).

High Growth Earnings: AMAT's earnings are forecast to grow, but not significantly.

Revenue vs Market: AMAT's revenue (5.2% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: AMAT's revenue (5.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: AMAT's Return on Equity is forecast to be very high in 3 years time (55.6%).

Past Performance

How has Applied Materials performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AMAT has high quality earnings.

Growing Profit Margin: AMAT's current net profit margins (27.2%) are higher than last year (22.3%).

Past Earnings Growth Analysis

Earnings Trend: AMAT's earnings have grown by 16.4% per year over the past 5 years.

Accelerating Growth: AMAT's earnings growth over the past year (52.7%) exceeds its 5-year average (16.4% per year).

Earnings vs Industry: AMAT earnings growth over the past year (52.7%) underperformed the Semiconductor industry 70.4%.

Return on Equity

High ROE: AMAT's Return on Equity (58.3%) is considered outstanding.

Financial Health

How is Applied Materials's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AMAT's short term assets ($15.2B) exceed its short term liabilities ($6.7B).

Long Term Liabilities: AMAT's short term assets ($15.2B) exceed its long term liabilities ($7.2B).

Debt to Equity History and Analysis

Debt Level: AMAT's net debt to equity ratio (13.2%) is considered satisfactory.

Reducing Debt: AMAT's debt to equity ratio has reduced from 66.9% to 47.1% over the past 5 years.

Debt Coverage: AMAT's debt is well covered by operating cash flow (108.3%).

Interest Coverage: AMAT's interest payments on its debt are well covered by EBIT (33.1x coverage).

Balance Sheet

Dividend

What is Applied Materials's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.95%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: AMAT's dividend (0.95%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.58%).

High Dividend: AMAT's dividend (0.95%) is low compared to the top 25% of dividend payers in the US market (4.11%).

Stability and Growth of Payments

Stable Dividend: AMAT's dividends per share have been stable in the past 10 years.

Growing Dividend: AMAT's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (13%), AMAT's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (17.6%), AMAT's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

8.7yrs

Average management tenure

CEO

Gary Dickerson (64 yo)

9.92yrs

Tenure

US$35,265,559

Compensation

Mr. Gary E. Dickerson has been the Chief Executive Officer and President of Applied Materials, Inc. since September 1, 2013 and June 19, 2012 respectively. Mr. Dickerson is responsible for the day-to-day o...

CEO Compensation Analysis

Compensation vs Market: Gary's total compensation ($USD35.27M) is above average for companies of similar size in the US market ($USD13.34M).

Compensation vs Earnings: Gary's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: AMAT's management team is seasoned and experienced (8.7 years average tenure).

Board Members

Experienced Board: AMAT's board of directors are considered experienced (6.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/23 00:00
End of Day Share Price	2022/05/23 00:00
Earnings	2022/05/01
Annual Earnings	2021/10/31