Applied Materials (AMAT) Stock Sinks As Market Gains: What You Should Know

Applied Materials (AMAT) closed the most recent trading day at $42.73, moving -0.12% from the previous trading session. This change lagged the S&P 500's 0.62% gain on the day. Elsewhere, the Dow gained 0.52%, while the tech-heavy Nasdaq added 0.86%.

Heading into today, shares of the maker of chipmaking equipment had lost 9.29% over the past month, lagging the Computer and Technology sector's gain of 0.15% and the S&P 500's gain of 1.98% in that time.

Wall Street will be looking for positivity from AMAT as it approaches its next earnings report date. This is expected to be November 15, 2018. In that report, analysts expect AMAT to post earnings of $0.96 per share. This would mark year-over-year growth of 3.23%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4 billion, up 0.85% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.45 per share and revenue of $17.24 billion, which would represent changes of +36.92% and +18.61%, respectively, from the prior year.

Any recent changes to analyst estimates for AMAT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.95% lower within the past month. AMAT currently has a Zacks Rank of #3 (Hold).

In terms of valuation, AMAT is currently trading at a Forward P/E ratio of 9.62. This valuation marks a discount compared to its industry's average Forward P/E of 12.28.

We can also see that AMAT currently has a PEG ratio of 0.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AMAT's industry had an average PEG ratio of 1.25 as of yesterday's close.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 34, putting it in the top 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AMAT in the coming trading sessions, be sure to utilize Zacks.com.

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