Applied Materials, Inc. shares have been stuck in a horizontal trading range. Investors could benefit from a return of the share price to the lower level of the trading range to build up new long positions.
Summary
● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.
● According to Refinitiv, the company's ESG score for its industry is good.
Strengths
● The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
● The group's activity appears highly profitable thanks to its outperforming net margins.
● The company is in a robust financial situation considering its net cash and margin position.
● Analysts have consistently raised their revenue expectations for the company, which provides good prospects for the current and next years in terms of revenue growth.
● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
● The group usually releases upbeat results with huge surprise rates.
Weaknesses
● According to Standard & Poor's' forecast, revenue growth prospects are expected to be very low for the next fiscal years.
● The company's currently anticipated earnings per share (EPS) growth for the next few years is a notable weakness.
● With an enterprise value anticipated at 3.81 times the sales for the current fiscal year, the company turns out to be overvalued.
● The company appears highly valued given the size of its balance sheet.
● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
● For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.
● For the last 12 months, analysts have been regularly downgrading their EPS expectations. Analysts predict worse results for the company against their predictions a year ago.
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Applied Materials, Inc. specializes in the design, manufacture, and marketing of equipment for producing integrated circuits and semi-conductor components. The group develops systems used in the principal manufacturing stages of microchips (deposition systems using chemical vapors, the physical process or through epitaxy, photomasking systems, control programs, etc.).
Net sales break down by activity sector as follows: semiconductor industry (77.2%), flat screen industry (3.3%) and other (19.5%; photovoltaic and electronic industries).
Net sales are distributed geographically as follows: the United States (15.1%), China (27.3%), Taiwan (21.4%), Korea (17.4%), Japan (7.8%), Asia (2.9%) and Europe (8.1%).