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 has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. AMAT has a decent growth rate and is not valued too expensively. This makes AMAT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
AMAT had positive earnings in the past year.
AMAT had a positive operating cash flow in the past year.
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
The Return On Assets of AMAT (19.03%) is better than 92.73% of its industry peers.
The Return On Equity of AMAT (34.06%) is better than 92.73% of its industry peers.
AMAT has a Return On Invested Capital of 27.05%. This is amongst the best in the industry. AMAT outperforms 96.36% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AMAT is significantly above the industry average of 11.17%.
| 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 85.45% of its industry peers.
AMAT's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 29.22%, AMAT belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
AMAT's Operating Margin has improved in the last couple of years.
AMAT has a Gross Margin (47.73%) which is in line with its industry peers.
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.
AMAT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 9.71 indicates that AMAT is not in any danger for bankruptcy at the moment.
AMAT has a better Altman-Z score (9.71) than 80.00% 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.
AMAT has a Debt to FCF ratio of 1.05. This is in the better half of the industry: AMAT outperforms 76.36% of its industry peers.
AMAT has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.34, AMAT is not doing good in the industry: 63.64% of the companies in the same industry are doing better.
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 | 9.71 |
ROIC/WACC2.38
WACC11.37%
2.3 Liquidity
A Current Ratio of 2.68 indicates that AMAT has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.68, AMAT is in line with its industry, outperforming 45.45% of the companies in the same industry.
A Quick Ratio of 1.96 indicates that AMAT should not have too much problems paying its short term obligations.
AMAT's Quick ratio of 1.96 is in line compared to the rest of the industry. AMAT outperforms 42.73% of its industry peers.
| 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 11.77%, 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.
AMAT shows a small growth in Revenue. In the last year, the Revenue has grown by 5.99%.
AMAT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.22% yearly.
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
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.
AMAT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.14% yearly.
EPS Next Y9.63%
EPS Next 2Y8.73%
EPS Next 3Y8.87%
EPS Next 5Y10.23%
Revenue Next Year6.15%
Revenue Next 2Y6.14%
Revenue Next 3Y6.39%
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
AMAT is valuated rather expensively with a Price/Earnings ratio of 17.61.
Based on the Price/Earnings ratio, AMAT is valued cheaply inside the industry as 80.91% of the companies are valued more expensively.
AMAT's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.03.
A Price/Forward Earnings ratio of 15.85 indicates a correct valuation of AMAT.
Based on the Price/Forward Earnings ratio, AMAT is valued a bit cheaper than the industry average as 74.55% of the companies are valued more expensively.
AMAT is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.61 | ||
| Fwd PE | 15.85 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AMAT is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AMAT indicates a somewhat cheap valuation: AMAT is cheaper than 79.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.21 | ||
| EV/EBITDA | 15.32 |
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.
AMAT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.83
PEG (5Y)0.76
EPS Next 2Y8.73%
EPS Next 3Y8.87%
5. Dividend
5.1 Amount
AMAT has a Yearly Dividend Yield of 1.11%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.41, AMAT pays a better dividend. On top of this AMAT pays more dividend than 81.82% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, AMAT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.11% |
5.2 History
The dividend of AMAT is nicely growing with an annual growth rate of 12.01%!
AMAT has been paying a dividend for at least 10 years, so it has 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
19.74% of the earnings are spent on dividend by AMAT. This is a low number and sustainable payout ratio.
The dividend of AMAT is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.74%
EPS Next 2Y8.73%
EPS Next 3Y8.87%
162.23
-3.5 (-2.11%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners83.81%
Inst Owner Change-0.21%
Ins Owners0.02%
Ins Owner Change3.57%
Market Cap131.80B
Analysts80
Price Target206.79 (27.47%)
Short Float %2.04%
Short Ratio2.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.11% |
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)-2.26%
PT rev (3m)-4.19%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)0.75%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)-0.25%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.16%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)-1.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.61 | ||
| Fwd PE | 15.85 | ||
| P/S | 4.77 | ||
| P/FCF | 22.21 | ||
| P/OCF | 18.11 | ||
| P/B | 7.08 | ||
| P/tB | 9.02 | ||
| EV/EBITDA | 15.32 |
EPS(TTM)9.21
EY5.68%
EPS(NY)10.24
Fwd EY6.31%
FCF(TTM)7.31
FCFY4.5%
OCF(TTM)8.96
OCFY5.52%
SpS34.01
BVpS22.92
TBVpS18
PEG (NY)1.83
PEG (5Y)0.76
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 | 9.71 |
F-Score6
WACC11.37%
ROIC/WACC2.38
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 Y9.63%
EPS Next 2Y8.73%
EPS Next 3Y8.87%
EPS Next 5Y10.23%
Revenue 1Y (TTM)5.99%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%6.83%
Revenue Next Year6.15%
Revenue Next 2Y6.14%
Revenue Next 3Y6.39%
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%