Applied Materials Inc (AMAT, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. With a current share price of $196.41 and a daily gain of 1.72%, despite a three-month change of -4.82%, the company shows promising signs of substantial growth. A detailed analysis, supported by the GF Score, positions Applied Materials Inc for significant future success.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system from GuruFocus, assessing stocks based on five key valuation aspects from 2006 to 2021. Stocks with higher GF Scores typically yield better returns. Applied Materials Inc boasts a GF Score of 94 out of 100, indicating a high potential for outperformance, driven by its scores in financial strength (8/10), profitability (10/10), growth (10/10), GF Value (3/10), and momentum (9/10).
Understanding Applied Materials Inc's Business
Applied Materials Inc, with a market cap of $162.62 billion and annual sales of $26.5 billion, is the world's leading manufacturer of semiconductor wafer fabrication equipment. The company excels in deposition, a critical process in semiconductor manufacturing, and serves major clients like TSMC, Intel, and Samsung. Its broad product portfolio and market share leadership in various segments underscore its pivotal role in the semiconductor industry.
Financial Strength Breakdown
Applied Materials Inc's financial robustness is evident in its impressive Interest Coverage ratio of 32.42 and an Altman Z-Score of 11.2, indicating low risk of financial distress. The company's strategic debt management is reflected in its Debt-to-Revenue ratio of 0.23, showcasing a solid capital structure that supports sustained growth and stability.
Profitability Rank Breakdown
Applied Materials Inc's profitability is highlighted by its increasing Operating Margin, which has grown from 22.93% in 2019 to 28.87% in 2023. This trend, along with a consistent rise in Gross Margin over the past five years, demonstrates the company's efficiency in converting revenue into profit. The Piotroski F-Score and a Predictability Rank of 4.0 stars further affirm its financial health and operational consistency.
Growth Rank Breakdown
Applied Materials Inc is recognized for its commitment to growth, with a Growth Rank of 10/10. The company's 3-Year Revenue Growth Rate of 19% outperforms 75.33% of its industry peers. This growth is supported by a significant increase in EBITDA, emphasizing its ability to expand profitably.
Conclusion
Considering Applied Materials Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore other high-scoring companies using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
