| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| 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.
Applied Materials Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$106.00 |
| 52 Week High | US$167.06 |
| 52 Week Low | US$82.67 |
| Beta | 1.51 |
| 1 Month Change | 13.81% |
| 3 Month Change | -4.28% |
| 1 Year Change | -16.78% |
| 3 Year Change | 126.35% |
| 5 Year Change | 140.80% |
| Change since IPO | 23,093.18% |
Recent News & Updates
Applied Materials: Navigating 2 Successive Equipment Downturns
Semiconductors equipment shares have been going through a slowdown of consumer electronics products since June 30, 2022. In 2023, we will see another slowdown as a result of excessive capex spend in 2020-2021 during post-Covid recovery. Applied Materials received the greatest amount of revenue from those companies impacted by the 2022 and 2023 slowdown. In 2022 and through 2024, the semiconductor and semiconductor equipment market will have gone through a Bust, and Bust cycle. In this article I will present the timeframes of each cycle, the catalyst for the start and stop, and the semiconductor and semiconductor equipment companies most impacted. I will show that these two Bust cycles are different, and Applied Materials (AMAT) has the largest revenue exposure to each of these catalysts causing the bust. AMAT announces F3Q earnings after market close on August 18, 2022, and investors need to consider the issues presented in this article. Bust #1 Dismal Guidance from Semis The semiconductor industry started an upcycle on 6/16/22 when The 10-year Treasury rate started dropping, confirming the low in the S&P, as shown in Chart 1. I have been discussing the 10-year in a series of several Seeking Alpha articles, such as my July 1, 2022 Seeking Alpha article entitled "Why Are Tech Stocks Selling Off And What Is The Outlook?" where I noted that during this period, the S&P Technology Select Sector Index (IXT) dropped about 43%, as seen in Chart 1. YCharts Chart 1 I had noted in my article: "This correlation has been strong in 2022. Although analysts at Morningstar found minimal correlation between the 10-year treasury and technology stocks over a 15-year period, since January 2022 the rise in the 10-year due to inflation fears has significantly impacted technology stocks. Thus, as I stated above, if looking to buy the dip in tech stocks, you want to wait for the 10-year to top out." Well, the 10-year has indeed topped out and we can see the IXT beginning to increase in this inverse relationship. Then Micron (MU) gave weak guidance on 6/30/22, alerting investors to an upcoming period of uncertainty and unevenness in share performance. MU reported a slowdown in consumer electronics products such as PCs and smartphones. This news has caused a knee-jerk reaction among other semiconductor companies, as they too announced plans to curtail equipment purchases to reduce inventory and get supply-demand dynamics back on track. Companies responding to this downturn include: Micron Technology said it had lowered its capex plans amid weakening demand for consumer PCs and smartphones. SK Hynix has indefinitely postponed plans for a $3.3 billion expansion of a memory chip plant. The company is also considering cutting its 2023 capital expenditure by about a quarter to 16 trillion won ($12.2 billion). Samsung Electronics (SSNLF) scaled back facility spending by around 13% during the first six-month period from a year ago as it has become unsure of the second-half business prospects Taiwan Semiconductor Manufacturing (TSM) reduced its capital expenditures target for 2022 to the low end of its guidance range of $40 billion to $44 billion. Vanguard International Semiconductor has revised downward its capex outlook this year to NT$23 billion (US$766 million) from the NT$24 billion set previously. Waning demand from makers of smartphones and TV components is forcing SMIC to readjust its manufacturing plans. The economic downturn and inventory adjustments have spurred "rapid freeze and urgent order halts" as some clients hold off on placing new orders according to co-CEO Zhao Haijun. These cuts in capex are based on consumer electronics products, and in Chart 2, I show the inverse correlation between Consumer Sentiment (blue line) and Inflation Rate (orange line). Consumer Sentiment rose from 50.0 previously, which was the lowest recorded level since the university started collecting consumer sentiment data in November 1952. The slowdown in PCs and smartphones was responsible for weak guidance given by semiconductor manufacturers discussed above and the resulting capex cuts. This slowdown was a result of consumers cutting back on discretionary spending of items using semiconductor devices and using that money to pay for food and gasoline. YCharts Chart 2 This cut in consumer discretionary electronic products isn't too surprising when we see statistics showing that Inflation is costing the average American $717 a month, as shown in Chart 3, with data provided by the Joint Economic Committee Republicans. It shows the average monthly household inflation costs by spending category, July 2022, relative to January 2021 price levels state rank percent increase in prices since January 2021. JEC Chart 3 The JEC Calculations were obtained using: Bureau of Economic Analysis, Personal Consumption Expenditures; Bureau of Labor Statistics, Consumer Expenditure Survey; Census Bureau, American Community Survey. To date, the greatest impact of the slowdown in PCs and Smartphones has impacted memory companies, given their readjustment of capex plans. But consumer electronics products contain more than memory chips. Table 1 shows the percentages of revenues recorded by semiconductor type for the top six semiconductor equipment suppliers. We see that LRCX had the greatest revenues from memory, representing 66% of revenues. In the near term, I expect LRCX to address this issue in an upcoming earnings call. But again, consumer electronics products are filled with logic and processor chips, which means a strong impact on AMAT and ASML, according to The Information Network's report entitled "Semiconductor Equipment: Markets, Market Share, Market Forecasts." The Information Network Bust #2 The strong growth of semiconductors and semiconductor equipment in 2021, as shown in Chart 1 above, will also be a problem in 2023. On June 24, 2021 I published on Seeking Alpha an article entitled "Applied Materials: Tracking A Likely Semiconductor Equipment Meltdown In 2023." One year later: The economy of the U.S. and to a lesser degree most countries, has been turned upside down Analysts are just beginning to cut estimates of WFE sales in 2023, nearly a year after to the day after I published my thesis. For example, UBS analysts in a June 28, 2022 cut earnings estimates and price targets on the group of semiconductor equipment makers, citing lower forecasts for the rest of the year and into 2023. Note that this cut came out before Micron's June 30 earnings call. "We see major producers building inventories in hopes of demand improvement and we expect they will additionally cut capex and are already starting to push out tool shipments." The basis of my thesis on the drop in equipment markets in 2023 is due to the overspend of equipment resulting in an oversupply of chips, primarily coming from foundries, which had the largest fab construction growth. Fab construction continued unabated with 29 fabs built in 2021 and 2022 that could produce as many as 2.6 million wafers per month, according to SEMI consortia. Of these: 15 fabs are foundry facilities with capacities ranging from 30,000 to 220,000 wafers per month. Four are memory fabs with higher capacities ranging from 100,000 to 400,000 wafers per month Currently, new 300mm semiconductor volume fabs expected to begin operation from 2022 to 2025 raises the count to 199 volume fabs by 2025. This supercycle came on the heels of recovery from Covid and a "semiconductor shortage" that resulted in supply chain disruptions across a broad spectrum of industries, but primarily the auto industry. Interestingly, back in 1998 there was another "semiconductor shortage" from erroneous DRAM forecasts, which I detail in the above article. Chart 4 shows that the rise and abrupt fall in equipment billings in 2000 mirrors the growth in 2021. The resultant market crash lasted two years and resulted in $10 billion in excess inventory.
Is There An Opportunity With Applied Materials, Inc.'s (NASDAQ:AMAT) 43% Undervaluation?
Today we will run through one way of estimating the intrinsic value of Applied Materials, Inc. ( NASDAQ:AMAT ) by...
Applied Materials: Failed China Chip Sanctions And What It Means To Non-Chinese Semiconductor Equipment Companies
Chinese DRAM manufacturer Fujian Jinhua, sanctioned by the U.S in 2018, is continuing to make chips using domestic suppliers. China's SMIC has moved to the top tier of manufacturing after reaching 7nm node. Chinese domestic equipment companies represented 10% of total equipment purchases in China in Q1 2022. Applied Materials will be the biggest loser as China moves to self sufficiency in semiconductor equipment to make internal chips. Failed Fujian Sanctions In October 2018, the U.S. Commerce Department put Fujian Jinhua Integrated Circuit Co. Ltd. on a list of entities that cannot buy components, software and technology goods from U.S. firms amid allegations the firm stole intellectual property from U.S. semiconductor company Micron (MU). I discussed this in a November 6, 2018 Seeking Alpha article entitled “U.S. Restricts Exports Of Some Chip Production Equipment To China - Impact On Memory And Equipment Suppliers.” Fujian recently purchased equipment from domestic supplier Kingsemi, which manufacturers products that include photolithography process coating and developing equipment, and single-chip wet process equipment, as well as single-wafer processing equipment. Fujian's Q1 2022 revenue was 180 million yuan (US$22.7 million), a year-on-year increase of 62%. As of the end of Q3 2021, the company announced nearly 1.3 billion yuan in orders in hand. Failed SMIC Sanctions U.S. sanctions against China's SMIC (SMICY) haven't worked in the last 18 months as SMIC moved to the 7nm node using DUV lithography. I first reported SMIC moving to the 7nm node more than two months ago in a May 18, 2022 Seeking Alpha article entitled “Applied Materials: SMIC Move To 7nm Node Capability Another Headwind.” This was confirmed by semiconductor analyst firm TechInsights, which recently bought a cryptocurrency-mining ASIC manufactured by SMIC and found that it uses a 7nm process after doing a study of the chip's die. The ASIC is designed by a company called MinerVa. TechInsights also noted there appears to be a "close copy" of the one used by Taiwanese foundry giant TSMC. This is also consistent with what I said in my SA article two months earlier, that TSMC had made its first 7nm chip without EUV, and SMIC was able to do the same. China Equipment Suppliers According to The Information Network’s report entitled “Mainland China’s Semiconductor and Equipment Markets: Analysis and Manufacturing Trends,” the major domestic Chinese semiconductor equipment manufacturers in Q1 2022 generated revenues of nearly 5 billion yuan (US$740 million), a YoY increase of 63%. Two metrics are derived from this: In Q1 2022, $7.57 billion in equipment sold by non-Chinese companies was imported into China. This means that Chinese company sales represent about 10% of the China market. Chinese companies grew 63% YoY in Q1 while China equipment imports increased 27% YoY, indicating the 2X growth of domestic Chinese companies. The Information Network Chinese equipment is not only sold to Chinese semiconductor manufacturers. Technical capabilities of the equipment have enabled equipment be put in production lines of foreign semiconductor companies. AMEC’s etch system is used in TSMC’s 5nm fab and AMEC is developing a high aspect ratio etcher and staircase etcher for 128-layer 3D NAND manufacturing at YMTC. Other customers include SMIC, Huahong, and Huali. At the same time, NAURA is developing etchers and deposition equipment for 7nm and 5nm nodes. NAURA has a large product offering, and its customers consist of SMIC, Hua Hong, YMTC, and GTA Semiconductors. Chinese equipment companies supply nearly all the types of systems used to make a semiconductor chip. One type is furnace systems. NAURA also makes thermal furnaces and have a 45% share of China’s memory maker YMTC purchases. Shenyang Piotech supplies PECVD and ALD deposition equipment and has received orders from YMTC, and is also receiving repeat orders from Hua Hong and SMIC. What it Means for Non-Chinese Semiconductor Equipment Companies About 20 years ago, China was forced to make chips two nodes bigger than the companies outside China, and on 8" wafers. SEMI, the industry consortia whose members include ASML and AMAT and every equipment company, lobbied congress to eliminate these restrictions because (1) China said they wouldn't make chips for military, (2) SEMI wanted members who pay fees to make more money. As a result, Congress eliminated the restrictions and now China is free to make the chips with the latest nodes on 12" wafers. Now the U.S. is scrambling to impede China’s growth with sanctions, entity lists, and CHIPS acts. Sanctions have not impeded China, as SMIC is already at 7nm and China domestic equipment suppliers are making equipment at the 5nm node, selling to foreign chip companies, and growing 2x the rate of foreign competitors. The greed exemplified by SEMI on behalf of its members and U.S. sanctions have accelerated the determination and resolution for China to excel. With domestic Chinese equipment companies now representing 10% of China’s needs, foreign competitors are already impacted, and that extent of impact will grow. The semiconductor industry is facing a slowdown in consumer end products, largely as a result of a macroeconomic slowdown. But I also forecasted back in June 2021 a meltdown of semiconductor equipment that will occur in 2023, which I wrote about in my June 25, 2021 Seeking Alpha article entitled “Applied Materials: Tracking A Likely Semiconductor Equipment Meltdown In 2023.”
Assessing My 2021 Call For A Likely Semiconductor Equipment Meltdown In 2023 Impacting Applied Materials
Excessive overbuild of Foundries in 2021-22 will result in oversupply of logic semiconductors in 2023 as I said in June 2021. Applied Materials, the largest equipment company with the largest exposure to Foundries, will be affected the greatest by significant revenue reductions. The dour and uncertain economy is adding memory chips to the mix primarily as a result of a slowdown of consumer products like PCs. One year after my initial assessment on the oversupply, analysts are finally lowering WFE equipment demand for 2023. On June 24, 2021 I published on Seeking Alpha an article entitled “Applied Materials: Tracking A Likely Semiconductor Equipment Meltdown In 2023.” One year later: The economy of the U.S. and to a lesser degree most countries, has been turned upside down Analysts are just beginning to cut estimates of WFE sales in 2023, nearly a year after to the day after I published my thesis. For example, UBS analysts in a June 28, 2022 cut earnings estimates and price targets on the group of semiconductor equipment makers, citing lower forecasts for the rest of the year and into 2023. "We see major producers building inventories in hopes of demand improvement and we expect they will additionally cut capex and are already starting to push out tool shipments.” Since then, Applied Materials’ (AMAT) share price decreased 8.7%. In this article, with so many financial metrics that have changed in the past 12 months, I want to provide investors with an updated analysis for WFE (wafer front equipment) and semiconductor sectors. Background to 2021 Analysis Fundamentally in a semiconductor cycle, an expansion in semiconductor fabs results in a demand for semiconductor equipment used to make semiconductor chips. But the last few years have been atypical. Normally, semiconductor chip growth is about 6% per year and wafer front end ((WFE)) equipment growth is about 13% per year. But in 2020 and 2021, equipment purchases and semiconductor output were exceedingly large, as shown in Table 1, according to The Information Network’s report entitled “Global Semiconductor Equipment: Markets, Market Share, Market Forecast.” The Information Network Fab construction continued unabated with 29 fabs built in 2021 and 2022 that could produce as many as 2.6 million wafers per month, according to SEMI consortia. Of these: 15 fabs are foundry facilities with capacities ranging from 30,000 to 220,000 wafers per month. 4 are memory fabs with higher capacities ranging from 100,000 to 400,000 wafers per month Currently, new 300mm semiconductor volume fabs expected to begin operation from 2022 to 2025 raises the count to 199 volume fabs by 2025. One Year Later - 2022 Macroeconomic Factors The economy in 2022 is not the economy it was in 2021. Slowing economic growth rate in the United States Concern of recession Tightening monetary policy from the Federal Reserve Rising inflation rate Rising interest rates Residual global supply chain challenges Geopolitical concerns and residual damage like high oil prices The macroeconomic malaise is impacting consumer purchases of end-products using semiconductors. In poor economic times, consumers choose food and fuel instead of smartphones. Chart 1 illustrates the current conditions in the U.S. YCharts Chart 1 According to the latest report from the Bureau of Labor Statistics, the annual inflation rate in May was 8.6%, its highest level since 1981, as measured by the consumer price index. The University of Michigan consumer sentiment was a record low of 50.0 in June of 2022. Microeconomic Issues Last week, Micron’s (MU) CEO reported in the company’s Q3 earning call that he expects PC and smartphone sales to decline in 2H2022. That set the stage for a consensus miss in Q4 revenues and a downgrade. Bank of America analyst Vivek Arya downgraded Micron shares to neutral from buy, while cutting the price target, at the same time BofA also noted that Lam Research (LRCX), Applied Materials, and KLA Corp. (KLAC) are likely to be affected, as Micron plans to cut 2023 wafer fab equipment spending. Table 2 shows capex spend YoY change by leading semiconductor companies from 2019 through 2023. Capex is a combination of building structure (fabs) and equipment in an approximate 50:50 ratio. It shows my adjusted capex spend for Micron and SK Hynix moderating in 2023, while Logic and Foundry capex spend from Intel (INTC) and TSMC (TSM) are expected to drop significantly from strong capex spend in 2022. The Information Network WFE for 2022-2024 Tied to my initial thesis from 2021, Chart 2 shows my WFE equipment forecast for 2022-2024 by chip type. The YoY change shows a significant drop in Foundry (orange line) between 2022-2024, while the other sectors recover in 2024. Note that my analysis shows WFE growing in 2022 but dropping in 2023 and again in 2024, in alignment with my contention that an overbought situation of equipment (Chart 1 above) will give rise to an increase in semiconductor supply, which will reduce the demand for equipment. As I noted above of fab build, 15 fabs are foundry facilities with capacities ranging from 30,000 to 220,000 wafers per month. Only 4 are memory fabs with higher capacities ranging from 100,000 to 400,000 wafers per month. The Information Network Chart 2 Applied Materials Most Impacted Taiwan is the home to the largest semiconductor foundries – TSMC and United Microelectronics (UMC). Thus, cuts in capex spend should affect equipment imports in Taiwan the greatest. In Table 3, I show individual equipment suppliers and their exposure to Taiwan by quarter. Applied Materials, the largest semiconductor equipment company, generated 1,025 million in revenues in Q1 2022, ahead of any competitor. The Information Network In addition to Taiwan being an epicenter of Foundry fabs, Korea’s Samsung Electronics’ (OTC:SSNLF) capex is projected to increase just 2% in 2023 as shown in Table 2 above, which is also a negative for AMAT. Table 4 is another example of Applied Material’s exposure showing that Foundry represents 45% of its revenues in 2021 and logic another 11%. Thus, the cutbacks in Foundry and Logic capex for AMAT will have a significant impact on its financial metrics. The Information Network Investor Takeaway AMAT Metrics AMAT's share price is down 31.19% for the past 1-year and 42.98% YTD. It has been below its 200-day and 50-day moving average for nearly all of 2022, as shown in Chart 3. YCharts Chart 3 Chart 4 compares share performance for AMAT's competitors Lam Research (LRCX) and KLA (KLAC). It is worth noting that: AMAT and LRCX are competitors in Deposition and Etch equipment. In fact, in 2021, 94% of Lam's revenues were in deposition and etch and 67% of Applied's revenues were in deposition and etch. This means they are strong competitors, and positive results for AMAT should mean negative for LRCX, since they are competing for sales from the same semiconductor customers. Yet, share performance is nearly identical indicating that investors buy semi cap stocks as a sector rather than performing a deep-dive analysis of each company.
Shareholder Returns
| AMAT | US Semiconductor | US Market | |
|---|---|---|---|
| 7D | 0.9% | -0.3% | 1.1% |
| 1Y | -16.8% | -4.2% | -9.0% |
Return vs Industry: AMAT underperformed the US Semiconductor industry which returned -3.3% over the past year.
Return vs Market: AMAT underperformed the US Market which returned -8.9% over the past year.
Price Volatility
| AMAT volatility | |
|---|---|
| AMAT Average Weekly Movement | 7.2% |
| Semiconductor Industry Average Movement | 8.6% |
| Market Average Movement | 7.6% |
| 10% most volatile stocks in US Market | 17.0% |
| 10% least volatile stocks in US Market | 3.1% |
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 | 27,000 | 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
| AMAT fundamental statistics | |
|---|---|
| Market Cap | US$92.21b |
| Earnings (TTM) | US$6.76b |
| Revenue (TTM) | US$24.84b |
13.6x
P/E Ratio3.7x
P/S RatioIs AMAT overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| 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) | 7.77 |
| 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 comparisonDividends
1.0%
Current Dividend Yield13%
Payout RatioDoes AMAT pay a reliable dividends?
See AMAT dividend history and benchmarks| Applied Materials dividend dates | |
|---|---|
| Ex Dividend Date | Aug 24 2022 |
| Dividend Pay Date | Sep 15 2022 |
| Days until Ex dividend | 6 days |
| Days until Dividend pay date | 28 days |
Does AMAT pay a reliable dividends?
See AMAT dividend history and benchmarksValuation
Is AMAT undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
5/6Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for AMAT?
Other financial metrics that can be useful for relative valuation.
| What is AMAT's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$92.21b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 3.8x |
| Enterprise Value/EBITDA | 11.3x |
| PEG Ratio | 2.4x |
Price to Earnings Ratio vs Peers
How does AMAT's PE Ratio compare to its peers?
| AMAT PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 17.2x | ||
NXPI NXP Semiconductors | 19.3x | 7.4% | US$47.3b |
TER Teradyne | 18.7x | 18.9% | US$15.8b |
KLAC KLA | 16x | -0.7% | US$53.2b |
LRCX Lam Research | 14.8x | 0.5% | US$68.2b |
AMAT Applied Materials | 13.6x | 5.6% | US$92.2b |
Price-To-Earnings vs Peers: AMAT is good value based on its Price-To-Earnings Ratio (13.6x) compared to the peer average (17.2x).
Price to Earnings Ratio vs Industry
How does AMAT's PE Ratio compare vs other companies in the US Semiconductor Industry?
Price-To-Earnings vs Industry: AMAT is good value based on its Price-To-Earnings Ratio (13.6x) compared to the US Semiconductor industry average (20.2x)
Price to Earnings Ratio vs Fair Ratio
What is AMAT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 13.6x |
| Fair PE Ratio | 26.2x |
Price-To-Earnings vs Fair Ratio: AMAT is good value based on its Price-To-Earnings Ratio (13.6x) compared to the estimated Fair Price-To-Earnings Ratio (26.2x).
Share Price vs Fair Value
What is the Fair Price of AMAT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: AMAT ($106) is trading below our estimate of fair value ($183.47)
Significantly Below Fair Value: AMAT is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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Future Growth
How is Applied Materials forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?
Future Growth Score
2/6Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
5.6%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: AMAT's forecast earnings growth (5.6% per year) is above the savings rate (1.9%).
Earnings vs Market: AMAT's earnings (5.6% per year) are forecast to grow slower than the US market (14.5% per year).
High Growth Earnings: AMAT's earnings are forecast to grow, but not significantly.
Revenue vs Market: AMAT's revenue (4.1% per year) is forecast to grow slower than the US market (7.9% per year).
High Growth Revenue: AMAT's revenue (4.1% 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 (55.2%).
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Past Performance
How has Applied Materials performed over the past 5 years?
Past Performance Score
5/6Past 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 56.1%.
Return on Equity
High ROE: AMAT's Return on Equity (58.3%) is considered outstanding.
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Financial Health
How is Applied Materials's financial position?
Financial Health Score
6/6Financial 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 (34.4x coverage).
Balance Sheet
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Dividend
What is Applied Materials's current dividend yield, its reliability and sustainability?
Dividend Score
4/6Dividend Score 4/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
0.98%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: AMAT's dividend (0.98%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.47%).
High Dividend: AMAT's dividend (0.98%) is low compared to the top 25% of dividend payers in the US market (3.95%).
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 (13.2%), AMAT's dividend payments are thoroughly covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its low cash payout ratio (17.4%), AMAT's dividend payments are well covered by cash flows.
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Management
How experienced are the management team and are they aligned to shareholders interests?
8.9yrs
Average management tenure
CEO
Gary Dickerson (65 yo)
10.17yrs
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 ($USD12.87M).
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 (8.9 years average tenure).
Board Members
Experienced Board: AMAT's board of directors are considered experienced (6.7 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: AMAT insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Applied Materials, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Applied Materials, Inc.
- Ticker: AMAT
- Exchange: NasdaqGS
- Founded: 1967
- Industry: Semiconductor Equipment
- Sector: Semiconductors
- Implied Market Cap: US$92.214b
- Shares outstanding: 869.95m
- Website: https://www.appliedmaterials.com
Number of Employees
Location
- Applied Materials, Inc.
- 3050 Bowers Avenue
- PO Box 58039
- Santa Clara
- California
- 95052-3299
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/17 00:00 |
| End of Day Share Price | 2022/08/17 00:00 |
| Earnings | 2022/05/01 |
| Annual Earnings | 2021/10/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.