APPLIED MATERIALS INC (AP2.DE) Stock Fundamental Analysis
FRA:AP2 - Deutsche Boerse Ag - US0382221051 - Common Stock - Currency: EUR
Taking everything into account, AP2 scores 7 out of 10 in our fundamental rating. AP2 was compared to 52 industry peers in the Semiconductors & Semiconductor Equipment industry. AP2 gets an excellent profitability rating and is at the same time showing great financial health properties. AP2 has a correct valuation and a medium growth rate. This makes AP2 very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year AP2 was profitable.
In the past year AP2 had a positive cash flow from operations.
In the past 5 years AP2 has always been profitable.
AP2 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 19.03%, AP2 belongs to the top of the industry, outperforming 86.54% of the companies in the same industry.
With a decent Return On Equity value of 34.06%, AP2 is doing good in the industry, outperforming 78.85% of the companies in the same industry.
With an excellent Return On Invested Capital value of 21.53%, AP2 belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AP2 is significantly above the industry average of 15.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.03% | ||
| ROE | 34.06% | ||
| ROIC | 21.53% |
ROA(3y)22.53%
ROA(5y)21.31%
ROE(3y)44.41%
ROE(5y)43.1%
ROIC(3y)24%
ROIC(5y)23.04%
1.3 Margins
Looking at the Profit Margin, with a value of 22.95%, AP2 is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
AP2's Profit Margin has improved in the last couple of years.
AP2 has a better Operating Margin (29.22%) than 71.15% of its industry peers.
AP2's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 47.73%, AP2 perfoms like the industry average, outperforming 53.85% of the companies in the same industry.
In the last couple of years the Gross Margin of AP2 has grown nicely.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so AP2 is creating value.
Compared to 1 year ago, AP2 has less shares outstanding
AP2 has less shares outstanding than it did 5 years ago.
The debt/assets ratio for AP2 has been reduced compared to a year ago.
2.2 Solvency
AP2 has an Altman-Z score of 9.45. This indicates that AP2 is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.45, AP2 belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.
AP2 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.
AP2's Debt to FCF ratio of 1.05 is fine compared to the rest of the industry. AP2 outperforms 76.92% of its industry peers.
AP2 has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
AP2's Debt to Equity ratio of 0.34 is on the low side compared to the rest of the industry. AP2 is outperformed by 63.46% of its industry peers.
Although AP2 does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 1.05 | ||
| Altman-Z | 9.45 |
ROIC/WACC2.29
WACC9.42%
2.3 Liquidity
A Current Ratio of 2.68 indicates that AP2 has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.68, AP2 is in the better half of the industry, outperforming 63.46% of the companies in the same industry.
AP2 has a Quick Ratio of 1.96. This is a normal value and indicates that AP2 is financially healthy and should not expect problems in meeting its short term obligations.
AP2 has a Quick ratio of 1.96. This is in the better half of the industry: AP2 outperforms 61.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.68 | ||
| Quick Ratio | 1.96 |
3. Growth
3.1 Past
AP2 shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.33%, which is quite good.
The Earnings Per Share has been growing by 23.21% on average over the past years. This is a very strong growth
Looking at the last year, AP2 shows a small growth in Revenue. The Revenue has grown by 4.34% in the last year.
The Revenue has been growing by 13.22% on average over the past years. This is quite good.
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
AP2 is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.23% yearly.
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 17.46 indicates a rather expensive valuation of AP2.
Compared to the rest of the industry, the Price/Earnings ratio of AP2 indicates a somewhat cheap valuation: AP2 is cheaper than 63.46% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 24.21. AP2 is valued slightly cheaper when compared to this.
AP2 is valuated correctly with a Price/Forward Earnings ratio of 15.18.
Based on the Price/Forward Earnings ratio, AP2 is valued a bit cheaper than the industry average as 67.31% of the companies are valued more expensively.
AP2 is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.46 | ||
| Fwd PE | 15.18 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AP2 is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, AP2 is valued cheaply inside the industry as 82.69% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.31 | ||
| EV/EBITDA | 14.57 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AP2 has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.81
PEG (5Y)0.75
EPS Next 2Y8.81%
EPS Next 3Y8.91%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.18%, AP2 has a reasonable but not impressive dividend return.
In the last 3 months the price of AP2 has falen by -20.73%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 1.42, AP2 pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.18, AP2 pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.18% |
5.2 History
On average, the dividend of AP2 grows each year by 12.01%, which is quite nice.
Dividend Growth(5Y)12.01%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
19.74% of the earnings are spent on dividend by AP2. This is a low number and sustainable payout ratio.
The dividend of AP2 is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP19.74%
EPS Next 2Y8.81%
EPS Next 3Y8.91%
FRA:AP2 (5/9/2025, 7:00:00 PM)
137.78
-1.94 (-1.39%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners83.81%
Inst Owner ChangeN/A
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap111.94B
Analysts80
Price Target183.69 (33.32%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.18% |
Yearly Dividend1.28
Dividend Growth(5Y)12.01%
DP19.74%
Div Incr Years6
Div Non Decr Years6
Ex-DateN/A
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)-5.97%
PT rev (3m)-11.42%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)0.1%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.42%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-1.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.46 | ||
| Fwd PE | 15.18 | ||
| P/S | 4.58 | ||
| P/FCF | 21.31 | ||
| P/OCF | 17.38 | ||
| P/B | 6.79 | ||
| P/tB | 8.65 | ||
| EV/EBITDA | 14.57 |
EPS(TTM)7.89
EY5.73%
EPS(NY)9.08
Fwd EY6.59%
FCF(TTM)6.47
FCFY4.69%
OCF(TTM)7.93
OCFY5.75%
SpS30.11
BVpS20.29
TBVpS15.93
PEG (NY)1.81
PEG (5Y)0.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.03% | ||
| ROE | 34.06% | ||
| ROCE | 31.54% | ||
| ROIC | 21.53% | ||
| ROICexc | 31.26% | ||
| ROICexgc | 40.08% | ||
| 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)24%
ROIC(5y)23.04%
ROICexc(3y)31.66%
ROICexc(5y)31.28%
ROICexgc(3y)41.29%
ROICexgc(5y)41.69%
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 | 9.45 |
F-Score6
WACC9.42%
ROIC/WACC2.29
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%