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Applied Materials Inc AMAT

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Stock XNAS Rating as of
$147.72 −0.67 (0.45%)
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As of Delayed Price Pre-Open: $148.23 +0.50
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Company Report

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Applied Materials Earnings: Positive Period Is Our Focus, Despite Rumored Investigation

William Kerwin

We maintain our $152 fair value estimate for shares of wide-moat Applied Materials after the firm reported good fiscal fourth-quarter results and guidance largely met our expectations. Applied continues to enjoy strong demand for lagging-edge chip equipment, particularly out of China. Management is calling for this demand to moderate through fiscal 2024, but to be offset by recovering demand in advanced logic and memory chips.

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Price vs Fair Value

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AMAT is trading at a 3% discount.
Price
$147.71
Fair Value
$275.00
Uncertainty
High
1-Star Price
$226.10
5-Star Price
$56.80
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Applied Materials is the largest WFE provider in the world, with the broadest portfolio and the largest R&D budget of its peers.

Bears

We consider Applied Materials to be a generalist in WFE and competes with more specialized competitors like Lam Research and KLA that could outcompete the firm in their respective markets.

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News

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Trading Information

Previous Close Price
$148.39
Day Range
$145.99–148.81
52-Week Range
$93.68–157.76
Bid/Ask
$147.72 / $149.90
Market Cap
$123.57 Bil
Volume/Avg
176 / 5.7 Mil

Key Statistics

Price/Earnings (Normalized)
18.56
Price/Sales
4.71
Dividend Yield
0.83%
Dividend Yield (Forward)
0.87%
Total Yield
2.41%

Company Profile

Applied Materials is the largest semiconductor wafer fabrication equipment, or WFE, manufacturer in the world. Applied Materials has a broad portfolio spanning nearly every corner of the WFE ecosystem. Specifically, Applied Materials holds a market share leadership position in deposition, which entails the layering of new materials on semiconductor wafers. It is more exposed to general-purpose logic chips made at integrated device manufacturers and foundries. It counts the largest chipmakers in the world as customers, including TSMC, Intel, and Samsung.
Sector
Technology
Industry
Semiconductor Equipment & Materials
Stock Style Box
Large Core
Total Number of Employees
33,000
Website
https://www.appliedmaterials.com

Competitors

Valuation

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Metric
AMAT
LRCX
KLAC
Price/Earnings (Normalized)
 18.5623.0322.26
Price/Book Value
 7.5611.5424.30
Price/Sales
 4.715.997.30
Price/Cash Flow
 15.7520.5921.32
Price/Earnings
AMAT
LRCX
KLAC

Financial Strength

Metric
AMAT
LRCX
KLAC
Quick Ratio
 1.481.881.33
Current Ratio
 2.303.062.21
Interest Coverage
 32.3924.1512.78
Quick Ratio
AMAT
LRCX
KLAC

Profitability

Metric
AMAT
LRCX
KLAC
Return on Assets (Normalized)
 24.07%21.81%24.27%
Return on Equity (Normalized)
 50.50%51.05%125.49%
Return on Invested Capital (Normalized)
 35.67%31.56%40.00%
Return on Assets
AMAT
LRCX
KLAC

Semiconductor Equipment & Materials Industry Comparables

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Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
ASMLF
ASML Holding NVTbt$276.6 Bil
ASML
ASML Holding NV ADRXrkyb$276.6 Bil
LRCX
Lam Research CorpVhh$92.7 Bil
KLAC
KLA CorpFhcd$72.6 Bil
TOELF
Tokyo Electron LtdQfpqz$71.3 Bil
TOELY
Tokyo Electron Ltd ADRRxbwt$71.3 Bil
ASMIY
ASM International NV ADRDfgcph$24.1 Bil
ASMXF
ASM International NVZllckw$24.1 Bil
TER
Teradyne IncNvc$14.1 Bil