Applied Materials posted fourth quarter earnings that surpassed analysts’ expectations.
The chip equipment company’s adjusted earnings came in at $2.03 a share for the October quarter, beating the consensus of $1.73 (based on FactSet survey). Revenue of $6.75 billion also topped analysts’ expectations of $6.45 billion.
Applied Materials’ Semiconductor Systems segment generated sales of $5.04 billion (~75% of overall net sales), up +17% year-over-year. Applied Global Services sales rose +4% year-over-year to $1.42 billion (21% of net sales), while Display and Adjacent Markets revenue fell -40% year-over-year to $251 million (4% of net sales).
Sales in the US climbed 23.3% year-over-year, while those in Europe were up 13.3%. Korea and Taiwan had +7.8% increase and +66.8% rise respectively. Southeast Asia sales were up +120%. Sales in Japan slipped -1.1%, and those in China plunged -35% from the year-ago quarter.
The non-GAAP gross margin contracted -220 basis points to 46%. Non-GAAP operating margin of 29.8% was 330 bps narrower vs. the year-ago quarter’s figure.
For first-quarter fiscal 2023, Applied Materials projects net sales of $6.7 billion (+/-$400 million), higher than The Zacks Consensus Estimate of $6.38 billion. Guidance for non-GAAP earnings per share is $1.93 (+/-0.18) vs. The Zacks Consensus Estimate of $1.91.
The 50-day moving average for AMAT moved below the 200-day moving average on September 24, 2024. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
The 10-day RSI Indicator for AMAT moved out of overbought territory on September 27, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 35 similar instances where the indicator moved out of overbought territory. In of the 35 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on October 15, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on AMAT as a result. In of 89 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for AMAT turned negative on October 16, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at .
AMAT moved below its 50-day moving average on October 15, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMAT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
The 10-day moving average for AMAT crossed bullishly above the 50-day moving average on September 30, 2024. This indicates that the trend has shifted higher and could be considered a buy signal. In of 17 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where AMAT advanced for three days, in of 310 cases, the price rose further within the following month. The odds of a continued upward trend are .
AMAT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 258 cases where AMAT Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 67, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. AMAT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (9.950) is normal, around the industry mean (7.455). P/E Ratio (24.546) is within average values for comparable stocks, (58.452). Projected Growth (PEG Ratio) (2.493) is also within normal values, averaging (2.825). Dividend Yield (0.006) settles around the average of (0.020) among similar stocks. P/S Ratio (6.631) is also within normal values, averaging (43.049).
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a manufacturer of equipment and software for the semiconductor industries
Industry Semiconductors