NasdaqGS:AMAT

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Adequate balance sheet average dividend payer.


Similar Companies

Share Price & News

How has Applied Materials's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AMAT's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.5%

AMAT

3.5%

US Semiconductor

5.3%

US Market


1 Year Return

8.0%

AMAT

3.6%

US Semiconductor

-10.7%

US Market

Return vs Industry: AMAT exceeded the US Semiconductor industry which returned 3.6% over the past year.

Return vs Market: AMAT exceeded the US Market which returned -10.7% over the past year.


Shareholder returns

AMATIndustryMarket
7 Day2.5%3.5%5.3%
30 Day-23.8%-11.4%-13.6%
90 Day-26.3%-16.2%-19.8%
1 Year9.8%8.0%5.6%3.6%-8.9%-10.7%
3 Year24.8%19.4%51.2%42.8%15.5%8.0%
5 Year121.7%104.8%108.8%88.7%35.2%20.4%

Price Volatility Vs. Market

How volatile is Applied Materials's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

41.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AMAT ($45.84) is trading below our estimate of fair value ($78.51)

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 (15x) compared to the Semiconductor industry average (26.7x).

PE vs Market: AMAT is poor value based on its PE Ratio (15x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: AMAT is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: AMAT is overvalued based on its PB Ratio (4.9x) compared to the US Semiconductor industry average (2.3x).


Next Steps

Future Growth

How is Applied Materials forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

12.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AMAT's forecast earnings growth (12.2% per year) is above the savings rate (1.7%).

Earnings vs Market: AMAT's earnings (12.2% per year) are forecast to grow slower than the US market (12.3% per year).

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

Revenue vs Market: AMAT's revenue (6.6% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: AMAT's revenue (6.6% 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 high in 3 years time (34.7%)


Next Steps

Past Performance

How has Applied Materials performed over the past 5 years?

20.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AMAT has high quality earnings.

Growing Profit Margin: AMAT's current net profit margins (18.8%) are lower than last year (22.4%).


Past Earnings Growth Analysis

Earnings Trend: AMAT's earnings have grown significantly by 20.6% per year over the past 5 years.

Accelerating Growth: AMAT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AMAT had negative earnings growth (-22.3%) over the past year, making it difficult to compare to the Semiconductor industry average (-30.5%).


Return on Equity

High ROE: AMAT's Return on Equity (32.6%) is considered high.


Next Steps

Financial Health

How is Applied Materials's financial position?


Financial Position Analysis

Short Term Liabilities: AMAT's short term assets ($10.8B) exceed its short term liabilities ($4.6B).

Long Term Liabilities: AMAT's short term assets ($10.8B) exceed its long term liabilities ($6.5B).


Debt to Equity History and Analysis

Debt Level: AMAT's debt to equity ratio (61.4%) is considered high.

Reducing Debt: AMAT's debt to equity ratio has increased from 24.1% to 61.4% over the past 5 years.

Debt Coverage: AMAT's debt is well covered by operating cash flow (64%).

Interest Coverage: AMAT's interest payments on its debt are well covered by EBIT (27x coverage).


Balance Sheet

Inventory Level: AMAT has a high level of physical assets or inventory.

Debt Coverage by Assets: AMAT's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

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

1.92%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: AMAT's dividend (1.92%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.95%).

High Dividend: AMAT's dividend (1.92%) is low compared to the top 25% of dividend payers in the US market (5.37%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (27.5%), AMAT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AMAT's dividends in 3 years are forecast to be well covered by earnings (21.9% payout ratio).


Next Steps

Management

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

6.6yrs

Average management tenure


CEO

Gary Dickerson (62yo)

6.58s

Tenure

US$14,072,395

Compensation

Mr. Gary E. Dickerson has been an Executive Director of Applied Materials, Inc. since 2019. He has been the Chief Executive Officer and President of Applied Materials, Inc. since September 1, 2013 and June ...


CEO Compensation Analysis

Compensation vs Market: Gary's total compensation ($USD14.07M) is about average for companies of similar size in the US market ($USD11.77M).

Compensation vs Earnings: Gary's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Gary Dickerson
President6.58yrsUS$14.07m0.17% $71.7m
Daniel Durn
Senior VP & CFO2.67yrsUS$5.15m0.011% $4.6m
Steve Ghanayem
Senior Vice President of New Markets & Alliances Group2.42yrsUS$3.97m0.031% $13.0m
Ali Salehpour
Senior VP & GM of New Markets and Service Group6.58yrsUS$4.98m0.035% $14.8m
Prabu Raja
Senior Vice President of Semiconductor Products Group2.42yrsUS$3.90m0.026% $11.1m
Ginetto Addiego
Senior Vice President of Engineering4.83yrsUS$3.37m0.028% $11.6m
Charles Read
Corporate VP6.58yrsno data0.0062% $2.6m
Omkaram Nalamasu
Senior VP & CTO9.25yrsUS$3.44m0.012% $5.1m
Jay Kerley
Group VP & Chief Information Officer10.25yrsno datano data
Michael Sullivan
Vice President of Investor Relations11.25yrsno datano data

6.6yrs

Average Tenure

57yo

Average Age

Experienced Management: AMAT's management team is seasoned and experienced (6.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gary Dickerson
President6.58yrsUS$14.07m0.17% $71.7m
Xun Chen
Independent Director4.42yrsUS$312.62k0.0018% $736.3k
Aart de Geus
Independent Director12.75yrsUS$324.62k0.016% $6.8m
Judy Bruner
Independent Director3.75yrsUS$344.12k0.0022% $942.5k
James Morgan
Chairman Emeritus11.08yrsUS$454.23kno data
Stephen Forrest
Independent Director11.83yrsUS$337.87k0.0077% $3.3m
Scott McGregor
Independent Director2.25yrsUS$331.12k0.0011% $471.3k
Thomas Iannotti
Independent Chairman of the Board3.08yrsUS$476.62k0.0071% $3.0m
Adrianna Ma
Independent Director4.33yrsUS$345.12k0.00027% $113.6k
Alexander Karsner
Independent Director11.58yrsUS$312.62k0.0028% $1.2m

5.5yrs

Average Tenure

62.5yo

Average Age

Experienced Board: AMAT's board of directors are considered experienced (5.5 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 company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Applied Materials, Inc.
  • Ticker: AMAT
  • Exchange: NasdaqGS
  • Founded: 1967
  • Industry: Semiconductor Equipment
  • Sector: Semiconductors
  • Market Cap: US$42.077b
  • Shares outstanding: 918.31m
  • Website: https://www.appliedmaterials.com

Number of Employees


Location

  • Applied Materials, Inc.
  • 3050 Bowers Avenue
  • PO Box 58039
  • Santa Clara
  • California
  • 95052
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AMATNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 1972
AMAT *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1972
AP2DB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972
4336SEHK (The Stock Exchange of Hong Kong Ltd.)YesCommon StockHKHKDDec 1972
AP2XTRA (XETRA Trading Platform)YesCommon StockDEEURDec 1972
0R1ALSE (London Stock Exchange)YesCommon StockGBUSDDec 1972
AMATWBAG (Wiener Boerse AG)YesCommon StockATEURDec 1972
AP2ETLX (Eurotlx)YesCommon StockITEURDec 1972
AMATBASE (Buenos Aires Stock Exchange)CEDEAR EACH 5 REPR 1 ORD COM STK USD0.01ARARSSep 2000
A1MT34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

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. This segment also offers various technologies, including epitaxy, ion implantation, oxidation and nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices, as well as equipment for flexible substrates. The company serves manufacturers of semiconductor wafers and chips, liquid crystal and organic light-emitting diode displays, and other electronic devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. Applied Materials, Inc. was founded in 1967 and is headquartered in Santa Clara, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 03:36
End of Day Share Price2020/03/31 00:00
Earnings2020/01/26
Annual Earnings2019/10/27


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.