APPLIED MATERIALS INC (AMAT) Stock Fundamental Analysis
NASDAQ:AMAT - Nasdaq - US0382221051 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to AMAT. AMAT was compared to 109 industry peers in the Semiconductors & Semiconductor Equipment industry. AMAT scores excellent points on both the profitability and health parts. This is a solid base for a good stock. AMAT has a correct valuation and a medium growth rate. With these ratings, AMAT could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
AMAT had positive earnings in the past year.
In the past year AMAT had a positive cash flow from operations.
Each year in the past 5 years AMAT has been profitable.
AMAT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AMAT's Return On Assets of 19.03% is amongst the best of the industry. AMAT outperforms 93.58% of its industry peers.
With an excellent Return On Equity value of 34.06%, AMAT belongs to the best of the industry, outperforming 92.66% of the companies in the same industry.
AMAT has a Return On Invested Capital of 27.05%. This is amongst the best in the industry. AMAT outperforms 96.33% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AMAT is significantly above the industry average of 11.28%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.03% | ||
| ROE | 34.06% | ||
| ROIC | 27.05% |
ROA(3y)22.53%
ROA(5y)21.31%
ROE(3y)44.41%
ROE(5y)43.1%
ROIC(3y)30.16%
ROIC(5y)28.95%
1.3 Margins
AMAT's Profit Margin of 22.95% is amongst the best of the industry. AMAT outperforms 85.32% of its industry peers.
In the last couple of years the Profit Margin of AMAT has grown nicely.
With an excellent Operating Margin value of 29.22%, AMAT belongs to the best of the industry, outperforming 89.91% of the companies in the same industry.
In the last couple of years the Operating Margin of AMAT has grown nicely.
AMAT has a Gross Margin (47.73%) which is comparable to the rest of the industry.
AMAT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.22% | ||
| PM (TTM) | 22.95% | ||
| GM | 47.73% |
OM growth 3Y-2.49%
OM growth 5Y4.68%
PM growth 3Y1.14%
PM growth 5Y7.35%
GM growth 3Y0.09%
GM growth 5Y1.66%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), AMAT is creating value.
The number of shares outstanding for AMAT has been reduced compared to 1 year ago.
AMAT has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, AMAT has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 9.21 indicates that AMAT is not in any danger for bankruptcy at the moment.
AMAT has a Altman-Z score of 9.21. This is amongst the best in the industry. AMAT outperforms 82.57% of its industry peers.
AMAT has a debt to FCF ratio of 1.05. This is a very positive value and a sign of high solvency as it would only need 1.05 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.05, AMAT is in the better half of the industry, outperforming 77.06% of the companies in the same industry.
A Debt/Equity ratio of 0.34 indicates that AMAT is not too dependend on debt financing.
AMAT has a worse Debt to Equity ratio (0.34) than 64.22% of its industry peers.
Even though the debt/equity ratio score it not favorable for AMAT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 1.05 | ||
| Altman-Z | 9.21 |
ROIC/WACC2.92
WACC9.27%
2.3 Liquidity
A Current Ratio of 2.68 indicates that AMAT has no problem at all paying its short term obligations.
With a Current ratio value of 2.68, AMAT perfoms like the industry average, outperforming 44.95% of the companies in the same industry.
AMAT has a Quick Ratio of 1.96. This is a normal value and indicates that AMAT is financially healthy and should not expect problems in meeting its short term obligations.
AMAT has a Quick ratio (1.96) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.68 | ||
| Quick Ratio | 1.96 |
3. Growth
3.1 Past
AMAT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.33%, which is quite good.
Measured over the past years, AMAT shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.21% on average per year.
The Revenue has been growing slightly by 4.34% in the past year.
Measured over the past years, AMAT shows a quite strong growth in Revenue. The Revenue has been growing by 13.22% on average per year.
EPS 1Y (TTM)9.33%
EPS 3Y8.08%
EPS 5Y23.21%
EPS Q2Q%11.74%
Revenue 1Y (TTM)4.34%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%6.84%
3.2 Future
Based on estimates for the next years, AMAT will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.23% on average per year.
The Revenue is expected to grow by 7.14% on average over the next years.
EPS Next Y9.67%
EPS Next 2Y8.81%
EPS Next 3Y8.91%
EPS Next 5Y10.23%
Revenue Next Year6.22%
Revenue Next 2Y6.25%
Revenue Next 3Y6.47%
Revenue Next 5Y7.14%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.74, which indicates a correct valuation of AMAT.
Compared to the rest of the industry, the Price/Earnings ratio of AMAT indicates a somewhat cheap valuation: AMAT is cheaper than 76.15% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of AMAT to the average of the S&P500 Index (28.88), we can say AMAT is valued slightly cheaper.
AMAT is valuated correctly with a Price/Forward Earnings ratio of 14.55.
Based on the Price/Forward Earnings ratio, AMAT is valued a bit cheaper than 77.98% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.20. AMAT is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.74 | ||
| Fwd PE | 14.55 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AMAT indicates a somewhat cheap valuation: AMAT is cheaper than 74.31% of the companies listed in the same industry.
82.57% of the companies in the same industry are more expensive than AMAT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.42 | ||
| EV/EBITDA | 13.88 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
AMAT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.73
PEG (5Y)0.72
EPS Next 2Y8.81%
EPS Next 3Y8.91%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.23%, AMAT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.75, AMAT pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.23, AMAT pays less dividend than the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
5.2 History
On average, the dividend of AMAT grows each year by 12.01%, which is quite nice.
AMAT has been paying a dividend for at least 10 years, so it has a reliable track record.
AMAT has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.01%
Div Incr Years7
Div Non Decr Years19
5.3 Sustainability
19.74% of the earnings are spent on dividend by AMAT. This is a low number and sustainable payout ratio.
AMAT's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP19.74%
EPS Next 2Y8.81%
EPS Next 3Y8.91%
NASDAQ:AMAT (5/1/2025, 3:57:08 PM)
149.15
-1.56 (-1.04%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners83.81%
Inst Owner Change0.13%
Ins Owners0.02%
Ins Owner Change3.57%
Market Cap121.18B
Analysts80
Price Target207.84 (39.35%)
Short Float %2.07%
Short Ratio2.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
Yearly Dividend1.44
Dividend Growth(5Y)12.01%
DP19.74%
Div Incr Years7
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.97%
Min EPS beat(2)2.11%
Max EPS beat(2)3.84%
EPS beat(4)4
Avg EPS beat(4)2.92%
Min EPS beat(4)2.11%
Max EPS beat(4)3.84%
EPS beat(8)8
Avg EPS beat(8)4.87%
EPS beat(12)11
Avg EPS beat(12)4.88%
EPS beat(16)13
Avg EPS beat(16)4.17%
Revenue beat(2)0
Avg Revenue beat(2)-1.15%
Min Revenue beat(2)-1.62%
Max Revenue beat(2)-0.68%
Revenue beat(4)0
Avg Revenue beat(4)-0.76%
Min Revenue beat(4)-1.62%
Max Revenue beat(4)-0.31%
Revenue beat(8)4
Avg Revenue beat(8)0.48%
Revenue beat(12)6
Avg Revenue beat(12)0.25%
Revenue beat(16)8
Avg Revenue beat(16)0.06%
PT rev (1m)-2.2%
PT rev (3m)-5.68%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-1.26%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)-1.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.38%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.74 | ||
| Fwd PE | 14.55 | ||
| P/S | 4.38 | ||
| P/FCF | 20.42 | ||
| P/OCF | 16.65 | ||
| P/B | 6.51 | ||
| P/tB | 8.29 | ||
| EV/EBITDA | 13.88 |
EPS(TTM)8.91
EY5.97%
EPS(NY)10.25
Fwd EY6.87%
FCF(TTM)7.31
FCFY4.9%
OCF(TTM)8.96
OCFY6.01%
SpS34.01
BVpS22.92
TBVpS18
PEG (NY)1.73
PEG (5Y)0.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.03% | ||
| ROE | 34.06% | ||
| ROCE | 31.54% | ||
| ROIC | 27.05% | ||
| ROICexc | 39.27% | ||
| ROICexgc | 50.36% | ||
| OM | 29.22% | ||
| PM (TTM) | 22.95% | ||
| GM | 47.73% | ||
| FCFM | 21.48% |
ROA(3y)22.53%
ROA(5y)21.31%
ROE(3y)44.41%
ROE(5y)43.1%
ROIC(3y)30.16%
ROIC(5y)28.95%
ROICexc(3y)39.77%
ROICexc(5y)39.3%
ROICexgc(3y)51.88%
ROICexgc(5y)52.37%
ROCE(3y)34.44%
ROCE(5y)32.94%
ROICexcg growth 3Y-7.9%
ROICexcg growth 5Y3.47%
ROICexc growth 3Y-6.23%
ROICexc growth 5Y6.64%
OM growth 3Y-2.49%
OM growth 5Y4.68%
PM growth 3Y1.14%
PM growth 5Y7.35%
GM growth 3Y0.09%
GM growth 5Y1.66%
F-Score6
Asset Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 1.05 | ||
| Debt/EBITDA | 0.74 | ||
| Cap/Depr | 330.54% | ||
| Cap/Sales | 4.86% | ||
| Interest Coverage | 36.21 | ||
| Cash Conversion | 85.8% | ||
| Profit Quality | 93.57% | ||
| Current Ratio | 2.68 | ||
| Quick Ratio | 1.96 | ||
| Altman-Z | 9.21 |
F-Score6
WACC9.27%
ROIC/WACC2.92
Cap/Depr(3y)231.86%
Cap/Depr(5y)195.47%
Cap/Sales(3y)3.87%
Cap/Sales(5y)3.39%
Profit Quality(3y)95.26%
Profit Quality(5y)92.06%
High Growth Momentum
Growth
EPS 1Y (TTM)9.33%
EPS 3Y8.08%
EPS 5Y23.21%
EPS Q2Q%11.74%
EPS Next Y9.67%
EPS Next 2Y8.81%
EPS Next 3Y8.91%
EPS Next 5Y10.23%
Revenue 1Y (TTM)4.34%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%6.84%
Revenue Next Year6.22%
Revenue Next 2Y6.25%
Revenue Next 3Y6.47%
Revenue Next 5Y7.14%
EBIT growth 1Y5.54%
EBIT growth 3Y3%
EBIT growth 5Y18.52%
EBIT Next Year15.2%
EBIT Next 3Y10.02%
EBIT Next 5Y6.98%
FCF growth 1Y45.43%
FCF growth 3Y16.18%
FCF growth 5Y21.69%
OCF growth 1Y45.22%
OCF growth 3Y16.83%
OCF growth 5Y21.72%