Applied Materials Inc

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AMAT : NASDAQ : Technology
$40.61 | %
Today's Range: 40.58 - 41.33
Avg. Daily Volume: 8963500.0
04/28/17 - 4:00 PM ET

Financial Analysis


APPLIED MATERIALS INC's gross profit margin for the first quarter of its fiscal year 2017 has increased when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. APPLIED MATERIALS INC has strong liquidity. Currently, the Quick Ratio is 1.71 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 7.24% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)3278.02257.0
EBITDA ($mil)905.0449.0
EBIT ($mil)808.0353.0
Net Income ($mil)703.0286.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)4147.03116.0
Total Assets ($mil)15244.013326.0
Total Debt ($mil)3325.03343.0
Equity ($mil)7687.07168.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin46.8644.57
EBITDA Margin27.619.89
Operating Margin24.6515.64
Sales Turnover0.780.72
Return on Assets14.029.86
Return on Equity27.8118.34
Debt Q1 FY17 Q1 FY16
Current Ratio2.393.0
Debt/Capital0.30.32
Interest Expense38.042.0
Interest Coverage21.268.4


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)1079.831130.73
Div / share0.10.1
EPS0.650.25
Book value / share7.126.34
Institutional Own % n/a n/a
Avg Daily Volume9058818.01.0346298E7

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 34.98 for the Semiconductors & Semiconductor Equipment industry and a discount compared to the S&P 500 average of 24.92. Conducting a second comparison, its price-to-book ratio of 5.60 indicates a significant premium versus the S&P 500 average of 2.99 and a premium versus the industry average of 4.74. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, APPLIED MATERIALS INC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AMAT 20.35 Peers 34.98   AMAT 14.76 Peers 17.85

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

AMAT is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AMAT is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AMAT 14.00 Peers 19.92   AMAT 0.29 Peers 1.39

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

AMAT is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AMAT trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AMAT 5.60 Peers 4.74   AMAT 79.81 Peers 0.42

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AMAT is trading at a premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

AMAT is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AMAT 3.64 Peers 4.62   AMAT 23.95 Peers 23.82

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AMAT is trading at a discount to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

AMAT is keeping pace with its peers on the basis of sales growth.

 

 

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