Applied Materials manufactures materials engineering solutions for the semiconductor, flat panel display and solar photovoltaic industries, used in smartphones, flat screen TVs and solar panels. The company was founded in 1967 and is based in Santa Clara, California.
AMAT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Applied Materials Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Applied Materials Inc ranked in the 44th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 10.5%. In terms of the factors that were most noteworthy in this DCF analysis for AMAT, they are:
As a business, AMAT is generating more cash flow than 91.19% of positive cash flow stocks in the Technology.
The business' balance sheet suggests that 9% of the company's capital is sourced from debt; this is greater than merely 21.16% of the free cash flow producing stocks we're observing.
AMAT's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 38.38% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Applied Materials Inc? See ENPH, NOW, UI, WYY, and VMW.
During yesterday's earnings report, Micron said it would spend about $9B in 2021 capex, which Stifel analyst Patrick Ho sees as a potential positive for chip equipment stocks Applied Materials ([[AMAT]] +0.6%), Lam Research ([[LRCX]] -0.6%), and KLA ([[KLAC]] +1.4%).Ho: "While we have heard of some recent DRAM push outs, Micron...
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