APPLIED MATERIALS INC (AMAT) Stock Fundamental Analysis
NASDAQ:AMAT - Nasdaq - US0382221051 - Common Stock - Currency: USD
Overall AMAT gets a fundamental rating of 7 out of 10. We evaluated AMAT 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 correct valuation and a medium growth rate. This makes AMAT very considerable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year AMAT was profitable.
AMAT had a positive operating cash flow in the past year.
In the past 5 years AMAT has always been profitable.
In the past 5 years AMAT always reported a positive cash flow from operatings.
1.2 Ratios
AMAT has a better Return On Assets (20.09%) than 93.64% of its industry peers.
The Return On Equity of AMAT (35.64%) is better than 92.73% of its industry peers.
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.
The Average Return On Invested Capital over the past 3 years 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
Looking at the Profit Margin, with a value of 24.06%, AMAT belongs to the top of the industry, outperforming 85.45% of the companies in the same industry.
In the last couple of years the Profit Margin of AMAT has grown nicely.
The Operating Margin of AMAT (29.66%) is better than 90.00% of its industry peers.
In the last couple of years the Operating Margin of AMAT has grown nicely.
With a Gross Margin value of 48.14%, AMAT perfoms like the industry average, outperforming 57.27% of the companies in the same industry.
AMAT's Gross Margin has improved in the last couple of years.
| 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
AMAT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, AMAT has less shares outstanding
The number of shares outstanding for AMAT has been reduced compared to 5 years ago.
AMAT has a better debt/assets ratio than last year.
2.2 Solvency
AMAT has an Altman-Z score of 10.72. This indicates that AMAT is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 10.72, AMAT is doing good in the industry, outperforming 79.09% of the companies in the same industry.
AMAT has a debt to FCF ratio of 1.07. This is a very positive value and a sign of high solvency as it would only need 1.07 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.07, AMAT is in the better half of the industry, outperforming 76.36% of the companies in the same industry.
AMAT has a Debt/Equity ratio of 0.33. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.33, 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 | 0.33 | ||
| Debt/FCF | 1.07 | ||
| Altman-Z | 10.72 |
ROIC/WACC2.42
WACC11.52%
2.3 Liquidity
A Current Ratio of 2.46 indicates that AMAT has no problem at all paying its short term obligations.
AMAT has a Current ratio of 2.46. This is in the lower half of the industry: AMAT underperforms 62.73% of its industry peers.
A Quick Ratio of 1.76 indicates that AMAT should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.76, AMAT is doing worse than 65.45% of the companies in the same industry.
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.
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, AMAT shows a small growth in Revenue. The Revenue has grown by 5.99% in the last year.
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 10.33% on average per year.
The Revenue is expected to grow by 7.18% on average over the next years.
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
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
With a Price/Earnings ratio of 21.64, AMAT is valued on the expensive side.
Based on the Price/Earnings ratio, AMAT is valued a bit 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 (27.51), we can say AMAT is valued slightly cheaper.
The Price/Forward Earnings ratio is 19.36, which indicates a rather expensive current valuation of AMAT.
Based on the Price/Forward Earnings ratio, AMAT is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
AMAT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 35.58.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.64 | ||
| Fwd PE | 19.36 |
4.2 Price Multiples
72.73% of the companies in the same industry are more expensive than AMAT, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AMAT indicates a somewhat cheap valuation: AMAT is cheaper than 77.27% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.29 | ||
| EV/EBITDA | 17.87 |
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)1.85
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.
Compared to an average industry Dividend Yield of 2.17, 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 2.35, AMAT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.93% |
5.2 History
The dividend of AMAT is nicely growing with an annual growth rate of 12.01%!
AMAT has paid a dividend for at least 10 years, which is 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
19.40% 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.
DP19.4%
EPS Next 2Y9.04%
EPS Next 3Y9.5%
199.29
+2.19 (+1.11%)
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 Cap159.93B
Analysts80
Price Target201.29 (1%)
Short Float %1.93%
Short Ratio2.17
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 | 21.64 | ||
| Fwd PE | 19.36 | ||
| P/S | 5.69 | ||
| P/FCF | 27.29 | ||
| P/OCF | 21.45 | ||
| P/B | 8.43 | ||
| P/tB | 10.69 | ||
| EV/EBITDA | 17.87 |
EPS(TTM)9.21
EY4.62%
EPS(NY)10.3
Fwd EY5.17%
FCF(TTM)7.3
FCFY3.66%
OCF(TTM)9.29
OCFY4.66%
SpS35
BVpS23.63
TBVpS18.65
PEG (NY)1.85
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 | 10.72 |
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%