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:
Below please find a table outlining a discounted cash flow forecast for AMAT, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Applied Materials Inc ranked in the 50th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 3.5%. In terms of the factors that were most noteworthy in this DCF analysis for AMAT, they are:
The business' balance sheet suggests that 11% of the company's capital is sourced from debt; this is greater than just 24.2% 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 38.8% of tickers in our DCF set.
The weighted average cost of capital for the company is 8. This value is greater than only 23.09% stocks in the Technology sector that generate free cash flow.
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 ALTR, UEIC, CSGS, IBM, and MCHP.
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