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 41th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Applied Materials Inc ended up being:
The company has produced more trailing twelve month cash flow than 91% of its sector Technology.
The business' balance sheet reveals debt to be 9% of the company's capital (with equity being the remaining amount). Approximately just 21.95% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
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 37.69% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as AMAT, try ADI, FTV, TEAM, ACIW, and AMOT.
Micron (NASDAQ:MU) delivered strong numbers in the first half of 2020, but going forward they probably face weaker demand. We had previously highlighted how in the first half of 2020 some OEMs were stocking up on inventory, to assure production in the back half of the year. This pulled forward...
Elazar Advisors, LLC on Seeking Alpha | September 15, 2020
On CNBC's "Fast Money Halftime Report," Tiffany McGhee recommended a long position in Vivint Smart Home Inc (NYSE: VVNT ). Pete Najarian thinks Applied Materials, Inc. … Full story available on Benzinga.com
Applied Materials (NASDAQ: AMAT ) shares are trading higher today. The shares of semiconductor companies are trading higher amid a rebound in tech names and after Nvidia announced the $40 billion acquisition of chipmaker Arm … Full story available on Benzinga.com