APPLIED MATERIALS INC (AMAT) Stock Fundamental Analysis
NASDAQ:AMAT - Nasdaq - US0382221051 - Common Stock - Currency: USD
AMAT gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 110 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 decent growth rate and is not valued too expensively. These ratings would make AMAT suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year AMAT was profitable.
In the past year AMAT had a positive cash flow from operations.
In the past 5 years AMAT has always been profitable.
AMAT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 20.09%, AMAT belongs to the top of the industry, outperforming 93.64% of the companies in the same industry.
With an excellent Return On Equity value of 35.64%, AMAT belongs to the best of the industry, outperforming 92.73% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 27.88%, AMAT belongs to the top of the industry, outperforming 97.27% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AMAT is significantly above the industry average of 10.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.09% | ||
| ROE | 35.64% | ||
| ROIC | 27.88% |
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 has a Profit Margin of 24.06%. This is amongst the best in the industry. AMAT outperforms 85.45% of its industry peers.
AMAT's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 29.66%, AMAT belongs to the best of the industry, outperforming 90.00% 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 (48.14%) which is in line with its industry peers.
In the last couple of years the Gross Margin of AMAT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.66% | ||
| PM (TTM) | 24.06% | ||
| GM | 48.14% |
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.
Compared to 1 year ago, AMAT has less shares outstanding
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 10.74 indicates that AMAT is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 10.74, AMAT is doing good in the industry, outperforming 79.09% of the companies in the same industry.
The Debt to FCF ratio of AMAT is 1.07, which is an excellent value as it means it would take AMAT, only 1.07 years of fcf income to pay off all of its debts.
AMAT's Debt to FCF ratio of 1.07 is fine compared to the rest of the industry. AMAT outperforms 76.36% of its industry peers.
AMAT has a Debt/Equity ratio of 0.33. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.33, AMAT is doing worse than 63.64% of the companies in the same industry.
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 | 0.33 | ||
| Debt/FCF | 1.07 | ||
| Altman-Z | 10.74 |
ROIC/WACC2.42
WACC11.52%
2.3 Liquidity
AMAT has a Current Ratio of 2.46. This indicates that AMAT is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of AMAT (2.46) is worse than 62.73% of its industry peers.
AMAT has a Quick Ratio of 1.76. 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 of 1.76. This is in the lower half of the industry: AMAT underperforms 65.45% of its industry peers.
AMAT does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.46 | ||
| Quick Ratio | 1.76 |
3. Growth
3.1 Past
AMAT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.77%, which is quite good.
AMAT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.21% yearly.
AMAT shows a small growth in Revenue. In the last year, the Revenue has grown by 5.99%.
The Revenue has been growing by 13.22% on average over the past years. This is quite good.
EPS 1Y (TTM)11.77%
EPS 3Y8.08%
EPS 5Y23.21%
EPS Q2Q%14.35%
Revenue 1Y (TTM)5.99%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%6.83%
3.2 Future
The Earnings Per Share is expected to grow by 10.33% on average over the next years. This is quite good.
Based on estimates for the next years, AMAT will show a small growth in Revenue. The Revenue will grow by 7.18% on average per year.
EPS Next Y11.68%
EPS Next 2Y9.04%
EPS Next 3Y9.5%
EPS Next 5Y10.33%
Revenue Next Year6.27%
Revenue Next 2Y6.02%
Revenue Next 3Y6.28%
Revenue Next 5Y7.18%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
Based on the Price/Earnings ratio of 21.49, the valuation of AMAT can be described as rather expensive.
AMAT's Price/Earnings ratio is a bit cheaper when compared to the industry. AMAT is cheaper than 77.27% of the companies in the same industry.
When comparing the Price/Earnings ratio of AMAT to the average of the S&P500 Index (27.41), we can say AMAT is valued slightly cheaper.
A Price/Forward Earnings ratio of 19.22 indicates a rather expensive valuation of AMAT.
Based on the Price/Forward Earnings ratio, AMAT is valued a bit cheaper than the industry average as 73.64% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 35.19. AMAT is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.49 | ||
| Fwd PE | 19.22 |
4.2 Price Multiples
73.64% of the companies in the same industry are more expensive than AMAT, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AMAT is valued a bit cheaper than 77.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.1 | ||
| EV/EBITDA | 17.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AMAT does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of AMAT may justify a higher PE ratio.
PEG (NY)1.84
PEG (5Y)0.93
EPS Next 2Y9.04%
EPS Next 3Y9.5%
5. Dividend
5.1 Amount
With a yearly dividend of 0.93%, AMAT is not a good candidate for dividend investing.
AMAT's Dividend Yield is rather good when compared to the industry average which is at 2.17. AMAT pays more dividend than 81.82% of the companies in the same industry.
With a Dividend Yield of 0.93, AMAT pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
5.2 History
On average, the dividend of AMAT grows each year by 12.01%, which is quite nice.
AMAT has paid a dividend for at least 10 years, which is a reliable track record.
AMAT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)12.01%
Div Incr Years7
Div Non Decr Years19
5.3 Sustainability
AMAT pays out 19.40% of its income as dividend. This is a sustainable payout ratio.
The dividend of AMAT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.4%
EPS Next 2Y9.04%
EPS Next 3Y9.5%
197.93
-0.1 (-0.05%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners83.29%
Inst Owner Change-0.02%
Ins Owners0.26%
Ins Owner Change0.6%
Market Cap158.84B
Analysts80
Price Target201.29 (1.7%)
Short Float %2.07%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
Yearly Dividend1.44
Dividend Growth(5Y)12.01%
DP19.4%
Div Incr Years7
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.7%
Min EPS beat(2)1.29%
Max EPS beat(2)2.11%
EPS beat(4)4
Avg EPS beat(4)2.49%
Min EPS beat(4)1.29%
Max EPS beat(4)3.84%
EPS beat(8)8
Avg EPS beat(8)4.2%
EPS beat(12)12
Avg EPS beat(12)5.37%
EPS beat(16)13
Avg EPS beat(16)3.89%
Revenue beat(2)0
Avg Revenue beat(2)-1.98%
Min Revenue beat(2)-2.34%
Max Revenue beat(2)-1.62%
Revenue beat(4)0
Avg Revenue beat(4)-1.27%
Min Revenue beat(4)-2.34%
Max Revenue beat(4)-0.43%
Revenue beat(8)3
Avg Revenue beat(8)-0.05%
Revenue beat(12)6
Avg Revenue beat(12)0.39%
Revenue beat(16)7
Avg Revenue beat(16)-0.16%
PT rev (1m)-0.07%
PT rev (3m)-4.86%
EPS NQ rev (1m)0.17%
EPS NQ rev (3m)1.73%
EPS NY rev (1m)1.87%
EPS NY rev (3m)1.78%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)0.37%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.49 | ||
| Fwd PE | 19.22 | ||
| P/S | 5.65 | ||
| P/FCF | 27.1 | ||
| P/OCF | 21.3 | ||
| P/B | 8.38 | ||
| P/tB | 10.61 | ||
| EV/EBITDA | 17.95 |
EPS(TTM)9.21
EY4.65%
EPS(NY)10.3
Fwd EY5.2%
FCF(TTM)7.3
FCFY3.69%
OCF(TTM)9.29
OCFY4.69%
SpS35
BVpS23.63
TBVpS18.65
PEG (NY)1.84
PEG (5Y)0.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.09% | ||
| ROE | 35.64% | ||
| ROCE | 32.5% | ||
| ROIC | 27.88% | ||
| ROICexc | 37.43% | ||
| ROICexgc | 46.97% | ||
| OM | 29.66% | ||
| PM (TTM) | 24.06% | ||
| GM | 48.14% | ||
| FCFM | 20.87% |
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-Score7
Asset Turnover0.84
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.33 | ||
| Debt/FCF | 1.07 | ||
| Debt/EBITDA | 0.72 | ||
| Cap/Depr | 386.2% | ||
| Cap/Sales | 5.68% | ||
| Interest Coverage | 37.36 | ||
| Cash Conversion | 85.26% | ||
| Profit Quality | 86.73% | ||
| Current Ratio | 2.46 | ||
| Quick Ratio | 1.76 | ||
| Altman-Z | 10.74 |
F-Score7
WACC11.52%
ROIC/WACC2.42
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)11.77%
EPS 3Y8.08%
EPS 5Y23.21%
EPS Q2Q%14.35%
EPS Next Y11.68%
EPS Next 2Y9.04%
EPS Next 3Y9.5%
EPS Next 5Y10.33%
Revenue 1Y (TTM)5.99%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%6.83%
Revenue Next Year6.27%
Revenue Next 2Y6.02%
Revenue Next 3Y6.28%
Revenue Next 5Y7.18%
EBIT growth 1Y8.89%
EBIT growth 3Y3%
EBIT growth 5Y18.52%
EBIT Next Year15.87%
EBIT Next 3Y9.95%
EBIT Next 5Y6.82%
FCF growth 1Y-0.88%
FCF growth 3Y16.18%
FCF growth 5Y21.69%
OCF growth 1Y8.25%
OCF growth 3Y16.83%
OCF growth 5Y21.72%