Applied Materials, Inc. (AMAT) receives a strong valuation ranking of 95 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. AMAT has a better value than 95% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
Metrics Analysis
AMAT has a trailing twelve month Price to Earnings (PE) ratio of 16.6 which places it around the histroical average of roughly 15. AMAT is currently trading at a average value due to investors paying around what the stock is worth in relation to its earnings. AMAT's trailing-12-month earnings per share (EPS) of 3.44 does justify its share price in the market. Trailing PE ratios don't factor in the company's projected growth rate, resulting in select firms having high PE ratios due to high growth potential enticing investors even when the underlying company has produced low earnings to date.
AMAT currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.1. The market is currently fairly valuing AMAT in relation to its projected growth due to the PEG ratio being around the fair market value of 1. AMAT's PEG comes from its forward price to earnings ratio being divided by its growth rate. Due to the inclusion of more fundamentals of a company's overall health and a focus on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.
Summary
All together these valuation metrics paint a pretty adequate picture for AMAT at its current price due to a fairly valued PEG ratio despite strong growth. The PE and PEG for AMAT are around the average of the market resulting in a valuation score of 95.
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