APPLIED MATERIALS INC (AP2.DE) Stock Fundamental Analysis
FRA:AP2 - Deutsche Boerse Ag - US0382221051 - Common Stock - Currency: EUR
AP2 gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 56 industry peers in the Semiconductors & Semiconductor Equipment industry. AP2 has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. AP2 has a decent growth rate and is not valued too expensively. This makes AP2 very considerable for quality investing!
1. Profitability
1.1 Basic Checks
AP2 had positive earnings in the past year.
AP2 had a positive operating cash flow in the past year.
Each year in the past 5 years AP2 has been profitable.
Each year in the past 5 years AP2 had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 20.86%, AP2 belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
AP2 has a better Return On Equity (37.77%) than 80.36% of its industry peers.
AP2's Return On Invested Capital of 20.71% is fine compared to the rest of the industry. AP2 outperforms 76.79% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AP2 is significantly above the industry average of 16.97%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 37.77% | ||
| ROIC | 20.71% |
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
AP2 has a better Profit Margin (26.41%) than 80.36% of its industry peers.
In the last couple of years the Profit Margin of AP2 has grown nicely.
AP2 has a better Operating Margin (28.95%) than 76.79% of its industry peers.
AP2's Operating Margin has improved in the last couple of years.
The Gross Margin of AP2 (47.46%) is comparable to the rest of the industry.
AP2's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), AP2 is creating some 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 a debt to FCF ratio of 0.84. This is a very positive value and a sign of high solvency as it would only need 0.84 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.84, AP2 belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
AP2 has a Debt/Equity ratio of 0.33. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of AP2 (0.33) is worse than 60.71% 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 | 0.33 | ||
| Debt/FCF | 0.84 | ||
| Altman-Z | N/A |
ROIC/WACC1.5
WACC13.8%
2.3 Liquidity
AP2 has a Current Ratio of 2.51. This indicates that AP2 is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.51, AP2 is doing good in the industry, outperforming 66.07% of the companies in the same industry.
AP2 has a Quick Ratio of 1.87. This is a normal value and indicates that AP2 is financially healthy and should not expect problems in meeting its short term obligations.
With a decent Quick ratio value of 1.87, AP2 is doing good in the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.51 | ||
| Quick Ratio | 1.87 |
3. Growth
3.1 Past
AP2 shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.58%.
Measured over the past years, AP2 shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.21% on average per year.
The Revenue has been growing slightly by 2.49% in the past year.
Measured over the past years, AP2 shows a quite strong growth in Revenue. The Revenue has been growing by 13.22% on average per year.
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
Based on estimates for the next years, AP2 will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.44% on average per year.
AP2 is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.06% yearly.
EPS Next Y10.35%
EPS Next 2Y10.65%
EPS Next 3Y8.5%
EPS Next 5Y11.44%
Revenue Next Year8.22%
Revenue Next 2Y8.23%
Revenue Next 3Y7.17%
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.
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 20.19 indicates a rather expensive valuation of AP2.
Based on the Price/Earnings ratio, AP2 is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 28.58. AP2 is valued slightly cheaper when compared to this.
AP2 is valuated rather expensively with a Price/Forward Earnings ratio of 18.30.
The rest of the industry has a similar Price/Forward Earnings ratio as AP2.
When comparing the Price/Forward Earnings ratio of AP2 to the average of the S&P500 Index (95.03), we can say AP2 is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.19 | ||
| Fwd PE | 18.3 |
4.2 Price Multiples
AP2's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, AP2 is valued cheaper than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.01 | ||
| EV/EBITDA | 16.88 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of AP2 may justify a higher PE ratio.
PEG (NY)1.95
PEG (5Y)0.87
EPS Next 2Y10.65%
EPS Next 3Y8.5%
5. Dividend
5.1 Amount
With a yearly dividend of 0.88%, AP2 is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.49, AP2 has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, AP2's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
5.2 History
The dividend of AP2 is nicely growing with an annual growth rate of 12.01%!
Dividend Growth(5Y)12.01%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
AP2 pays out 16.61% of its income as dividend. This is a sustainable payout ratio.
The dividend of AP2 is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP16.61%
EPS Next 2Y10.65%
EPS Next 3Y8.5%
APPLIED MATERIALS INC
FRA:AP2 (2/5/2025, 3:51:30 PM)
169.22
-3.06 (-1.78%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners84.43%
Inst Owner ChangeN/A
Ins Owners0.23%
Ins Owner ChangeN/A
Market Cap137.69B
Analysts79.07
Price Target203.96 (20.53%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
Yearly Dividend1.44
Dividend Growth(5Y)12.01%
DP16.61%
Div Incr Years6
Div Non Decr Years6
Ex-DateN/A
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)-3.42%
PT rev (3m)-5.67%
EPS NQ rev (1m)-0.53%
EPS NQ rev (3m)1.99%
EPS NY rev (1m)-1.18%
EPS NY rev (3m)-3.33%
Revenue NQ rev (1m)-0.36%
Revenue NQ rev (3m)-0.79%
Revenue NY rev (1m)-0.47%
Revenue NY rev (3m)-2.76%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.19 | ||
| Fwd PE | 18.3 | ||
| P/S | 5.24 | ||
| P/FCF | 19.01 | ||
| P/OCF | 16.4 | ||
| P/B | 7.49 | ||
| P/tB | 9.47 | ||
| EV/EBITDA | 16.88 |
EPS(TTM)8.38
EY4.95%
EPS(NY)9.25
Fwd EY5.46%
FCF(TTM)8.9
FCFY5.26%
OCF(TTM)10.32
OCFY6.1%
SpS32.32
BVpS22.59
TBVpS17.86
PEG (NY)1.95
PEG (5Y)0.87
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 20.86% | ||
| ROE | 37.77% | ||
| ROCE | 30.33% | ||
| ROIC | 20.71% | ||
| ROICexc | 32.07% | ||
| ROICexgc | 41.68% | ||
| 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)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 Turnover0.79
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
WACC13.8%
ROIC/WACC1.5
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 Y10.35%
EPS Next 2Y10.65%
EPS Next 3Y8.5%
EPS Next 5Y11.44%
Revenue 1Y (TTM)2.49%
Revenue growth 3Y5.62%
Revenue growth 5Y13.22%
Sales Q2Q%4.79%
Revenue Next Year8.22%
Revenue Next 2Y8.23%
Revenue Next 3Y7.17%
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%