Applied Materials, Inc. ($AMAT) Earnings (Q3 FY22)

 Applied Materials, Inc. ($AMAT) Earnings and Opinion:


Applied Materials is a company in the Technology sector and operates in the Semiconductor Equipment and Materials industry. The company provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. Applied Materials was incorporated in 1967 and is currently headquartered in Santa Clara, California. The company was first traded on the stock market in 1972.

Applied Materials Earnings Results:

  • Revenues of $6.52B beating expectations of $6.26B
  • Gross Profit of $3.01 beating expectations of $2.88B
  • Operating Income of $1.95B beating expectations of $1.82B
  • Adjusted EPS of $1.94 beating expectations of $1.78
  • Guidance for the next quarter beat consensus estimates
Opinion:
Applied Materials is moving a tad bit higher after reporting earnings this afternoon. The company was able to beat all estimates on the top line, as well as beat all margin estimates. The guidance was very promising for the final quarter of their fiscal year. Overall, the company should have nothing to frown upon as the earnings couldn't get much better than this. However, in the earnings call, the CEO said that supply challenges limited their ability to meet demand needs. This should change in the coming months as the hot economy with inflation and supply chain issues starts to calm down. As far as valuation goes, the P/E ratio is sitting at 13.94 which is a little bit lower than the industry average of 15.51. The P/S ratio is at 3.79, which is also below the industry average of 4.08. The company seems to be sitting pretty well with a current ratio of 2.29 and although debt outweighs cash, it is at a comfortable level in which there should be no panic. The profitability measures are also in a good place with ROA and ROE levels super high. These are all good things for investors to look at and stand out for investors to buy. I think this company is fairly valued and maybe a little undervalued for what it has to bring to the table. This stock is definitely a buy right now, especially with one of their only concerns being the fact that they aren't able meet demand. Hopefully the economy will cool down and the supply challenges will ease and lead to demand being met. If this is the case, upside will be very likely for this stock and a good return will be highly likely.


*Information from Yahoo Finance, CMLVIZ, Consensus Gurus, CSI Market

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