APPLIED MATERIALS INC (AMAT) Stock Fundamental Analysis
NASDAQ:AMAT - Nasdaq - US0382221051 - Common Stock
AMAT gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 109 industry peers in the Semiconductors & Semiconductor Equipment industry. Both the health and profitability get an excellent rating, making AMAT a very profitable company, without any liquidiy or solvency issues. 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
AMAT had positive earnings in the past year.
In the past year AMAT had a positive cash flow from operations.
In the past 5 years AMAT has always been profitable.
Each year in the past 5 years AMAT had a positive operating cash flow.
1.2 Ratios
The Return On Assets of AMAT (20.86%) is better than 97.22% of its industry peers.
AMAT has a Return On Equity of 37.77%. This is amongst the best in the industry. AMAT outperforms 92.59% of its industry peers.
AMAT has a Return On Invested Capital of 26.02%. This is amongst the best in the industry. AMAT outperforms 96.30% of its industry peers.
AMAT had an Average Return On Invested Capital over the past 3 years of 30.16%. This is significantly above the industry average of 11.96%.
The last Return On Invested Capital (26.02%) for AMAT is well below the 3 year average (30.16%), which needs to be investigated, but indicates that AMAT had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 37.77% | ||
| ROIC | 26.02% |
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
With an excellent Profit Margin value of 26.41%, AMAT belongs to the best of the industry, outperforming 87.96% of the companies in the same industry.
In the last couple of years the Profit Margin of AMAT has grown nicely.
AMAT's Operating Margin of 28.95% is amongst the best of the industry. AMAT outperforms 88.89% of its industry peers.
AMAT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 47.46%, AMAT is in line with its industry, outperforming 56.48% of the companies in the same industry.
In the last couple of years the Gross Margin of AMAT has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.95% | ||
| PM (TTM) | 26.41% | ||
| GM | 47.46% |
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
AMAT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for AMAT has been reduced compared to 1 year ago.
The number of shares outstanding for AMAT has been reduced compared to 5 years ago.
Compared to 1 year ago, AMAT has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of AMAT is 0.84, which is an excellent value as it means it would take AMAT, only 0.84 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AMAT (0.84) is better than 81.48% of its industry peers.
A Debt/Equity ratio of 0.33 indicates that AMAT is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.33, AMAT is not doing good in the industry: 62.96% of the companies in the same industry are doing better.
Although AMAT 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 | 0.33 | ||
| Debt/FCF | 0.84 | ||
| Altman-Z | N/A |
ROIC/WACC1.78
WACC14.64%
2.3 Liquidity
AMAT has a Current Ratio of 2.51. This indicates that AMAT is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.51, AMAT is in line with its industry, outperforming 44.44% of the companies in the same industry.
A Quick Ratio of 1.87 indicates that AMAT should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.87, AMAT is in line with its industry, outperforming 46.30% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.51 | ||
| Quick Ratio | 1.87 |
3. Growth
3.1 Past
AMAT shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.58%.
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 2.49%.
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)7.58%
EPS 3Y8.08%
EPS 5Y23.21%
EPS Q2Q%9.43%
Revenue 1Y (TTM)2.49%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%4.79%
3.2 Future
AMAT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.44% yearly.
Based on estimates for the next years, AMAT will show a quite strong growth in Revenue. The Revenue will grow by 8.06% on average per year.
EPS Next Y11.67%
EPS Next 2Y12%
EPS Next 3Y9.57%
EPS Next 5Y11.44%
Revenue Next Year8.43%
Revenue Next 2Y8.38%
Revenue Next 3Y7.3%
Revenue Next 5Y8.06%
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 22.27, which indicates a rather expensive current 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 77.78% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, AMAT is valued a bit cheaper.
AMAT is valuated rather expensively with a Price/Forward Earnings ratio of 19.94.
Based on the Price/Forward Earnings ratio, AMAT is valued a bit cheaper than the industry average as 77.78% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, AMAT is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.27 | ||
| Fwd PE | 19.94 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AMAT is valued a bit cheaper than the industry average as 73.15% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, AMAT is valued cheaper than 87.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.96 | ||
| EV/EBITDA | 18.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AMAT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.91
PEG (5Y)0.96
EPS Next 2Y12%
EPS Next 3Y9.57%
5. Dividend
5.1 Amount
AMAT has a yearly dividend return of 0.86%, which is pretty low.
Compared to an average industry Dividend Yield of 2.28, AMAT pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, AMAT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
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 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
16.61% 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.
DP16.61%
EPS Next 2Y12%
EPS Next 3Y9.57%
APPLIED MATERIALS INC
NASDAQ:AMAT (1/21/2025, 8:00:00 PM)
After market: 195 +2.13 (+1.1%)192.87
+0.82 (+0.43%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners84.43%
Inst Owner Change0.04%
Ins Owners0.23%
Ins Owner Change2.81%
Market Cap156.93B
Analysts79.07
Price Target220.36 (14.25%)
Short Float %2.28%
Short Ratio2.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.86% |
Yearly Dividend1.44
Dividend Growth(5Y)12.01%
DP16.61%
Div Incr Years7
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.27%
Min EPS beat(2)2.71%
Max EPS beat(2)3.84%
EPS beat(4)4
Avg EPS beat(4)4.79%
Min EPS beat(4)2.71%
Max EPS beat(4)9.58%
EPS beat(8)8
Avg EPS beat(8)4.97%
EPS beat(12)10
Avg EPS beat(12)4.7%
EPS beat(16)13
Avg EPS beat(16)4.46%
Revenue beat(2)0
Avg Revenue beat(2)-0.55%
Min Revenue beat(2)-0.68%
Max Revenue beat(2)-0.43%
Revenue beat(4)1
Avg Revenue beat(4)0.03%
Min Revenue beat(4)-0.68%
Max Revenue beat(4)1.53%
Revenue beat(8)4
Avg Revenue beat(8)0.53%
Revenue beat(12)6
Avg Revenue beat(12)0.37%
Revenue beat(16)9
Avg Revenue beat(16)0.27%
PT rev (1m)-1.75%
PT rev (3m)-8.51%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.53%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.06%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.44%
Revenue NY rev (1m)-0.28%
Revenue NY rev (3m)-3.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.27 | ||
| Fwd PE | 19.94 | ||
| P/S | 5.77 | ||
| P/FCF | 20.96 | ||
| P/OCF | 18.09 | ||
| P/B | 8.26 | ||
| P/tB | 10.45 | ||
| EV/EBITDA | 18.26 |
EPS(TTM)8.66
EY4.49%
EPS(NY)9.67
Fwd EY5.01%
FCF(TTM)9.2
FCFY4.77%
OCF(TTM)10.66
OCFY5.53%
SpS33.4
BVpS23.35
TBVpS18.46
PEG (NY)1.91
PEG (5Y)0.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 37.77% | ||
| ROCE | 30.33% | ||
| ROIC | 26.02% | ||
| ROICexc | 40.29% | ||
| ROICexgc | 52.36% | ||
| OM | 28.95% | ||
| PM (TTM) | 26.41% | ||
| GM | 47.46% | ||
| FCFM | 27.55% |
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 Turnover0.79
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.33 | ||
| Debt/FCF | 0.84 | ||
| Debt/EBITDA | 0.76 | ||
| Cap/Depr | 303.57% | ||
| Cap/Sales | 4.38% | ||
| Interest Coverage | 38.38 | ||
| Cash Conversion | 105.06% | ||
| Profit Quality | 104.32% | ||
| Current Ratio | 2.51 | ||
| Quick Ratio | 1.87 | ||
| Altman-Z | N/A |
F-Score6
WACC14.64%
ROIC/WACC1.78
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)7.58%
EPS 3Y8.08%
EPS 5Y23.21%
EPS Q2Q%9.43%
EPS Next Y11.67%
EPS Next 2Y12%
EPS Next 3Y9.57%
EPS Next 5Y11.44%
Revenue 1Y (TTM)2.49%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%4.79%
Revenue Next Year8.43%
Revenue Next 2Y8.38%
Revenue Next 3Y7.3%
Revenue Next 5Y8.06%
EBIT growth 1Y2.78%
EBIT growth 3Y3%
EBIT growth 5Y18.52%
EBIT Next Year16.74%
EBIT Next 3Y10.63%
EBIT Next 5YN/A
FCF growth 1Y-1.41%
FCF growth 3Y16.18%
FCF growth 5Y21.69%
OCF growth 1Y-0.26%
OCF growth 3Y16.83%
OCF growth 5Y21.72%