Applied Materials Inc.

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AMAT : NASDAQ : Electronic Technology
$56.07 -0.06 | -0.11%
Today's Range: 55.81 - 56.98
Avg. Daily Volume: 1.28554E7
02/22/18 - 4:00 PM ET

Financial Analysis


APPLIED MATERIALS INC's gross profit margin for the first quarter of its fiscal year 2018 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. APPLIED MATERIALS INC is extremely liquid. Currently, the Quick Ratio is 2.19 which clearly shows the ability to cover any short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 10.65% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY18 Q1 FY17
Net Sales ($mil)4204.03278.0
EBITDA ($mil)1316.0905.0
EBIT ($mil)1197.0808.0
Net Income ($mil)135.0703.0


Balance Sheet Q1 FY18 Q1 FY17
Cash & Equiv. ($mil)7454.04147.0
Total Assets ($mil)19663.015244.0
Total Debt ($mil)5305.03325.0
Equity ($mil)8506.07687.0


Profitability Q1 FY18 Q1 FY17
Gross Profit Margin48.546.86
EBITDA Margin31.327.6
Operating Margin28.4724.65
Sales Turnover0.790.78
Return on Assets14.5714.02
Return on Equity33.6927.81
Debt Q1 FY18 Q1 FY17
Current Ratio2.962.39
Debt/Capital0.380.3
Interest Expense59.038.0
Interest Coverage20.2921.26


Share Data Q1 FY18 Q1 FY17
Shares outstanding (mil)1060.01079.83
Div / share0.10.1
EPS0.130.65
Book value / share8.027.12
Institutional Own % n/a n/a
Avg Daily Volume1.3461075E71.0186091E7

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 37.56 for the Semiconductors & Semiconductor Equipment industry and a discount compared to the S&P 500 average of 25.51. For additional comparison, its price-to-book ratio of 6.73 indicates a significant premium versus the S&P 500 average of 3.26 and a discount versus the industry average of 6.88. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, APPLIED MATERIALS INC proves to trade 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 20.37 Peers 37.56   AMAT 12.89 Peers 23.82

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 significant 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 11.61 Peers 20.48   AMAT 0.52 Peers 0.82

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 significant 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 6.73 Peers 6.88   AMAT 35.20 Peers 103.74

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

AMAT is trading at a valuation on par with its peers.

 

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

However, AMAT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AMAT 3.70 Peers 5.96   AMAT 30.53 Peers 22.16

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 significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

AMAT has a sales growth rate that significantly exceeds its peers.

 

 

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