Applied Materials, Inc. (NASDAQ: AMAT) offers materials engineering solutions used to produce virtually every new chip and advanced display in the world.
Key Highlights:
- In FY21, the company’s net sales grew 34% on y-o-y basis to USD 23,063 million, supported by strong growth from the semiconductor systems and applied global services.
- Net income stood at USD 5,888 million in FY21, surged from USD 3,619 million in FY20.
- Free cash flow of the firm surged to USD 4,774 million, significantly higher than USD 3,382 million in pcp.
- At the end of Q4FY21, the company reported its quick ratio 1.86x, lower than the industry median 2.40x. Moreover, the company’s current ratio stood at 2.54x, lower than the industry median of 3.15x.
Stock Recommendation:
For Q1FY22, the company expects its revenue in between USD 6.16 billion, wherein semiconductor systems would expect to likely to contribute USD 4.46 billion, while USD 1.33 billion is expected from Applied Global Services. The stock of AMAT has corrected ~9% and ~11% in the last one month and three months, respectively. The stock of AMAT is available at a higher valuation of P/E multiples of 16.2x on NTM basis, as compared to the industry (Semiconductors & Semiconductor Equipment) median of 7.7x. Hence, considering the aforesaid facts, we give a ‘Watch’ stance on the stock of AMAT at the closing price of USD 136.13 on February 07, 2022.
One-Year Technical Price Chart (as on February 07, 2022). Analysis by Kalkine Group
Note: The reference data in this report has been partly sourced from REFINITIV.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.