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$81.93|
|52 Week High||US$167.06|
|52 Week Low||US$81.53|
|1 Month Change||-10.76%|
|3 Month Change||-5.03%|
|1 Year Change||-36.55%|
|3 Year Change||61.03%|
|5 Year Change||56.36%|
|Change since IPO||17,826.57%|
Recent News & Updates
Applied Materials: Stronger Financials Across The Board
Summary We forecasted the Applied Materials, Inc.'s revenue growth of each segment based on historical growth and estimated a revenue opportunity reaching $53,245 mln by 2026. In terms of margins, we modeled its gross margin, EBIT margin, and net margin to stabilize at 47.19%, 27.38% and 23.58%, respectively, in 2022. As Applied Materials, Inc. expands production, we estimated its additional subsidized Capex of $1,688 mln on top of projected Capex of $712 mln. Providing semiconductor manufacturing systems and display manufacturing systems, Applied Materials, Inc.'s (AMAT) stock price has fallen by 43.9% as compared to its peak. We analyzed the revenue, margins and Capex to determine the intrinsic value of the company and determine if there is a mismatch with its stock price. We also calculated how much Applied Materials could benefit from the U.S. CHIPS Act subsidies. Semiconductor Systems Drives Overall Revenue Growth in 2022 Segment ($ mln) 2016 2017 2018 2019 2020 2021 Semiconductor Systems 6,873 9,517 10,903 9,027 11,367 16,286 Growth 38% 15% -17% 26% 43% % of Revenue 78% 65% 63% 62% 66% 70% Applied Global Services 589 3,017 3,754 3,854 4,155 5,013 Growth 412% 24% 3% 8% 21% % of Revenue 7% 21% 22% 26% 24% 22% Display and Adjacent Markets 1,206 1,900 2,498 1,651 1,607 1,834 Growth 58% 31% -34% -3% 14% % of Revenue 14% 13% 14% 11% 9% 8% Corporate and Other 157 103 98 76 73 130 Growth -34% -5% -22% -4% 78% % of Revenue 2% 1% 1% 1% 0% 1% Total 8,825 14,537 17,253 14,608 17,202 23,263 Growth 65% 19% -15% 18% 35% Source: Applied Materials, Khaveen Investments To determine the company’s projected revenue, we first computed the revenue growth and % of total revenue for each segment. The 5-year average growth rate for the Applied Global Services ("AGS") segment was the highest (93.56%). However, this was due to the segment’s growth being boosted by the substantially high growth rate in 2017 (412.22%) which we believe may be due to the semiconductor industry achieving the "highest growth rate in 14 years as of 2017" according to IHS Markit. Therefore, we excluded AGS’s 2017 metrics for all comparisons. Hence, we arrived at a 4-year average growth rate of 13.89% by excluding the 2017 growth as we believe it is an outlier and compared it with other segments’ 5-year average growth (excluding the Corporate and Other segment). Thus, the Semiconductor Systems segment had the highest average revenue growth (5-year average of 21%) whereas the Display and Adjacent Markets had the lowest 5-year average growth (13.31%). Additionally, in 2021, the Semiconductor Systems segment had shown the highest growth (43.27%) due to the "strong demand" as mentioned by management. However, in 2019, all segments had negative revenue growth whereas the Display and Adjacent Markets segment had the largest decrease of 36% which we believe was due to the falling LCD panel prices. In contrast, the Applied Global Services segment grew by 3% in 2019 which we believe was due to its subscription nature providing a recurring revenue. Overall, the average growth rate of all segments for the past 3-year average had been much lower than the 5-year average. Furthermore, for the segment breakdown as % of revenue, the Semiconductor Systems segment remained the largest throughout the 6 years with 70.01% of revenue in 2021 (an increase as compared to the 2017 figure of 65.47%). Additionally, the AGS segment % of revenue increased from 20.75% to 21.55% from 2017 to 2021. In addition, the Display and Adjacent Markets segment% of the total revenue decreased from 2016. Applied Materials Segments Projections ($ mln) 2022F 2023F 2024F 2025F 2026F Semiconductor Systems 19,707 23,846 28,855 34,916 42,250 Growth 21% 21% 21% 21% 21% % of Revenue 72% 74% 76% 78% 79% Applied Global Services 5,709 6,502 7,405 8,434 9,605 Growth 14% 14% 14% 14% 14% % of Revenue 21% 20% 20% 19% 18% Display and Adjacent Markets 1,697 1,570 1,452 1,344 1,243 Growth -7% -7% -7% -7% -7% % of Revenue 6% 5% 4% 3% 2% Corporate and Other 133 137 140 143 147 Growth 2% 2% 2% 2% 2% % of Revenue 0% 0% 0% 0% 0% Total 27,246 32,055 37,852 44,836 53,245 Growth 17% 14% 12% 10% 9% Source: Applied Materials, Khaveen Investments We projected the revenue for each segment based on the historical growth. For the Semiconductor Systems segment, we projected it based on the 5-year average revenue growth of 21% compared to the semiconductor industry forecast (12.2% CAGR by 2029) based on Fortune Business Insights. We then projected the Applied Global Services segment based on the 4-year average growth rate of 13.89%, as we believe the 2017 figure was an outlier. Besides that, as mentioned by the management, the systems under the subscription agreement grew by 11% year-over-year which is in line with our projection of 13.89% for this segment. Furthermore, we believe that the subscription basis of this segment would provide a predictable, recurring and stable revenue for the company. For the Display and Adjacent Markets segment, as there is a huge difference between its 5-year (13%) and 3-year average growth (-7.00%), we used the 3-year average. As mentioned by the company’s management, the weakening in the consumer demand for products like smartphones, PCs and TVs supports our assumption for its growth forecast. Lastly, we projected the Corporate and Other segment based on the 5-year average growth of 2%. With that, we arrived at a projected total revenue of $27,246 mln in 2022 and tapered down its revenue growth for the following years by between 1% to 3% per year through 2026. Stable Margins from 2023 Applied Materials, Khaveen Investments Based on the company’s expense analysis chart, the company's COGS as a % of revenue was in decreasing trend, thus we used its latest COGS as a % of revenue for our projection. Whereas for SG&A, we used the 5-year average of 5.93% while for R&D expenses, we used the 10-year average of 13.88% as it is higher than the company’s 2021 R&D as a % of the revenue of 10.77%. We expect its R&D expenses to be higher as compared to 2021 as the company’s management mentioned that it was adding incremental capacity at our R&D and manufacturing sites to increase longer-term efficiency and output. However, we believe that the CHIPS Act subsidies of US$11 billion for investment in chip research and development could decrease the company’s R&D spending. Applied Materials, Khaveen Investments We computed the projected COGS, R&D and SG&A expenses based on the % of our revenue projection that we mentioned above. From our computation, we expect its gross margin, EBIT margin and net margin to be 47.19%, 27.38% and 23.58%, respectively, in 2022. We believe that its gross margin will remain high supported by the company’s following statement. expect to gradually increase our gross margins beginning in Q4 through a number of actions, including pricing adjustments, manufacturing cost reductions, logistics improvements and product reengineering. – Brice Hill, Chief Financial Officer. Beneficiary of CHIPS Act Subsidies Efficiency Analysis 2015 2016 2017 2018 2019 2020 2021 5-Year Average 2-Year Average Inventory Turnover 3.12x 3.05x 3.08x 2.63x 2.18x 2.47x 2.86x 2.81x 2.66x Days Sales Outstanding (days) 64 68 57 52 63 61 65 61 63 Days Payables Outstanding (days) 44 45 42 41 45 42 40 43 41 Days Inventory Outstanding (days) 117 120 118 139 167 148 128 132 138 Cash conversion Cycle (days) 21 22 16 11 18 19 25 18 22
Here How Much AMAT, KLAC, LRCX, and AMD may be Impacted by Future Licensing Requirements for China
The U.S. administration is may widen the restrictions on exports of semiconductors to China in order to limit China's ability to import technology that can be used against U.S. national security interests. Stocks like AMAT, KLAC, LRCX have 27%+ revenue exposure to the Chinese market which may be affected.
Applied Materials declares $0.26 dividend
Applied Materials (NASDAQ:AMAT) declares $0.26/share quarterly dividend, in line with previous. Forward yield 1.11% Payable Dec. 15; for shareholders of record Nov. 25; ex-div Nov. 23. See AMAT Dividend Scorecard, Yield Chart, & Dividend Growth.
|AMAT||US Semiconductor||US Market|
Return vs Industry: AMAT underperformed the US Semiconductor industry which returned -28.9% over the past year.
Return vs Market: AMAT underperformed the US Market which returned -23.2% over the past year.
|AMAT Average Weekly Movement||6.1%|
|Semiconductor Industry Average Movement||7.8%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: AMAT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: AMAT's weekly volatility (6%) has been stable over the past year.
About the Company
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|
Is AMAT overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|AMAT income statement (TTM)|
|Cost of Revenue||US$13.32b|
Last Reported Earnings
Jul 31, 2022
Next Earnings Date
Nov 17, 2022
|Earnings per share (EPS)||7.73|
|Net Profit Margin||26.42%|
How did AMAT perform over the long term?See historical performance and comparison
1.3%Current Dividend Yield
Does AMAT pay a reliable dividends?See AMAT dividend history and benchmarks
|Applied Materials dividend dates|
|Ex Dividend Date||Nov 23 2022|
|Dividend Pay Date||Dec 15 2022|
|Days until Ex dividend||52 days|
|Days until Dividend pay date||74 days|
Does AMAT pay a reliable dividends?See AMAT dividend history and benchmarks
Is AMAT undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 6/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
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?|
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|
NXPI NXP Semiconductors
LRCX Lam Research
AMAT Applied Materials
Price-To-Earnings vs Peers: AMAT is good value based on its Price-To-Earnings Ratio (10.6x) compared to the peer average (13.4x).
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 (10.6x) compared to the US Semiconductor industry average (15.5x)
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.
|Current PE Ratio||10.6x|
|Fair PE Ratio||23.9x|
Price-To-Earnings vs Fair Ratio: AMAT is good value based on its Price-To-Earnings Ratio (10.6x) compared to the estimated Fair Price-To-Earnings Ratio (23.9x).
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 ($81.93) is trading below our estimate of fair value ($193.63)
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 and analysts are within a statistically confident range of agreement.
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How is Applied Materials forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: AMAT's forecast earnings growth (2.8% per year) is above the savings rate (1.9%).
Earnings vs Market: AMAT's earnings (2.8% per year) are forecast to grow slower than the US market (14.8% per year).
High Growth Earnings: AMAT's earnings are forecast to grow, but not significantly.
Revenue vs Market: AMAT's revenue (2.5% per year) is forecast to grow slower than the US market (7.7% per year).
High Growth Revenue: AMAT's revenue (2.5% 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 (47.7%).
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How has Applied Materials performed over the past 5 years?
Past Performance Score5/6
Past Performance Score 5/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: AMAT has high quality earnings.
Growing Profit Margin: AMAT's current net profit margins (26.4%) are higher than last year (24.5%).
Past Earnings Growth Analysis
Earnings Trend: AMAT's earnings have grown by 17.8% per year over the past 5 years.
Accelerating Growth: AMAT's earnings growth over the past year (25.5%) exceeds its 5-year average (17.8% per year).
Earnings vs Industry: AMAT earnings growth over the past year (25.5%) underperformed the Semiconductor industry 49.2%.
Return on Equity
High ROE: AMAT's Return on Equity (55.1%) is considered outstanding.
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How is Applied Materials's financial position?
Financial Health Score6/6
Financial Health Score 6/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: AMAT's short term assets ($15.4B) exceed its short term liabilities ($6.8B).
Long Term Liabilities: AMAT's short term assets ($15.4B) exceed its long term liabilities ($7.3B).
Debt to Equity History and Analysis
Debt Level: AMAT's net debt to equity ratio (15.8%) is considered satisfactory.
Reducing Debt: AMAT's debt to equity ratio has reduced from 60.7% to 45.2% over the past 5 years.
Debt Coverage: AMAT's debt is well covered by operating cash flow (104.3%).
Interest Coverage: AMAT's interest payments on its debt are well covered by EBIT (32.9x coverage).
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What is Applied Materials's current dividend yield, its reliability and sustainability?
Dividend Score 4/6
Cash Flow Coverage
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
|Applied Materials Dividend Yield vs Market|
|Company (Applied Materials)||1.3%|
|Market Bottom 25% (US)||1.7%|
|Market Top 25% (US)||4.7%|
|Industry Average (Semiconductor)||2.1%|
|Analyst forecast in 3 Years (Applied Materials)||1.3%|
Notable Dividend: AMAT's dividend (1.27%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: AMAT's dividend (1.27%) is low compared to the top 25% of dividend payers in the US market (4.73%).
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 (13.3%), AMAT's dividend payments are thoroughly covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its low cash payout ratio (18.2%), AMAT's dividend payments are well covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Gary Dickerson (65 yo)
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
|Gary Dickerson's Compensation vs Applied Materials Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jul 31 2022||n/a||n/a|
|May 01 2022||n/a||n/a|
|Jan 30 2022||n/a||n/a|
|Oct 31 2021||US$35m||US$1m|
|Aug 01 2021||n/a||n/a|
|May 02 2021||n/a||n/a|
|Jan 31 2021||n/a||n/a|
|Oct 25 2020||US$17m||US$1m|
|Jul 26 2020||n/a||n/a|
|Apr 26 2020||n/a||n/a|
|Jan 26 2020||n/a||n/a|
|Oct 27 2019||US$14m||US$1m|
|Jul 28 2019||n/a||n/a|
|Apr 28 2019||n/a||n/a|
|Jan 27 2019||n/a||n/a|
|Oct 28 2018||US$14m||US$1m|
|Jul 29 2018||n/a||n/a|
|Apr 29 2018||n/a||n/a|
|Jan 28 2018||n/a||n/a|
|Oct 29 2017||US$15m||US$1m|
|Jul 30 2017||n/a||n/a|
|Apr 30 2017||n/a||n/a|
|Jan 29 2017||n/a||n/a|
|Oct 30 2016||US$20m||US$1m|
|Jul 31 2016||n/a||n/a|
|May 01 2016||n/a||n/a|
|Jan 31 2016||n/a||n/a|
|Oct 25 2015||US$18m||US$995k|
Compensation vs Market: Gary's total compensation ($USD35.27M) is above average for companies of similar size in the US market ($USD13.04M).
Compensation vs Earnings: Gary's compensation has increased by more than 20% in the past year.
Experienced Management: AMAT's management team is seasoned and experienced (9 years average tenure).
Experienced Board: AMAT's board of directors are considered experienced (6.8 years average tenure).
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
|14 Sep 22||SellUS$2,652||Timothy Deane||Individual||29||US$91.46|
|07 Jul 22||SellUS$895,000||Teri Little||Individual||10,000||US$89.50|
|06 Jul 22||SellUS$1,294,500||Teri Little||Individual||15,000||US$86.30|
|01 Dec 21||SellUS$42,651,115||Gary Dickerson||Individual||279,310||US$153.53|
|01 Dec 21||SellUS$3,187,295||Gary Dickerson||Individual||20,690||US$154.05|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||401,634||0.05%|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Applied Materials, Inc.'s employee growth, exchange listings and data sources
- Name: Applied Materials, Inc.
- Ticker: AMAT
- Exchange: NasdaqGS
- Founded: 1967
- Industry: Semiconductor Equipment
- Sector: Semiconductors
- Implied Market Cap: US$70.485b
- Shares outstanding: 860.31m
- Website: https://www.appliedmaterials.com
Number of Employees
- Applied Materials, Inc.
- 3050 Bowers Avenue
- PO Box 58039
- Santa Clara
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|AMAT||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Dec 1972|
|AMAT *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Dec 1972|
|AP2||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Dec 1972|
|4336||SEHK (The Stock Exchange of Hong Kong Ltd.)||Yes||Common Stock||HK||HKD||Dec 1972|
|AP2||XTRA (XETRA Trading Platform)||Yes||Common Stock||DE||EUR||Dec 1972|
|0R1A||LSE (London Stock Exchange)||Yes||Common Stock||GB||USD||Dec 1972|
|AMAT||WBAG (Wiener Boerse AG)||Yes||Common Stock||AT||EUR||Dec 1972|
|AP2||ETLX (Eurotlx)||Yes||Common Stock||IT||EUR||Dec 1972|
|AMAT||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 5 REPR 1 SHARE (USD)||AR||ARS||Sep 2000|
|AMATD||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 5 REPR 1 SHARE (USD)||AR||USD||Sep 2000|
|A1MT34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH REPR 1 COM||BR||BRL||Dec 2019|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/01 00:00|
|End of Day Share Price||2022/09/30 00:00|
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.