July 4, 2024
Top 10 Stock Applied Materials Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Applied Materials – Top 10 Stock in NASDAQ 100 Index
Applied Materials is listed as a top 10 stock on July 04, 2024 in the market index NASDAQ 100 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 89 (top 89% performer), Obermatt assesses an overall strong buy recommendation for Applied Materials on July 04, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Semiconductor Equipment |
| Index | Dividends USA, Renewables Users, NASDAQ 100, NASDAQ, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Applied Materials Strong Buy
| 360 METRICS | July 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 79 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| SENTIMENT | ||||||||
| SENTIMENT | 93 |
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| 360° VIEW | ||||||||
| 360° VIEW | 89 |
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ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Applied Materials are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Applied Materials. The consolidated Value Rank has an attractive rank of 79, which means that the share price of Applied Materials is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 79% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 71, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 93. But the company’s financing is risky with a Safety rank of 23. This means 77% of comparable companies have a safer financing structure than Applied Materials. ...read more
RECOMMENDATION: With a consolidated 360° View of 89, Applied Materials is better positioned than 89% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 79), above-average growth (Growth Rank of 71), and positive market sentiment in the professional investor community (Sentiment Rank of 93), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 23), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Applied Materials is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Applied Materials very positive
ANALYSIS: With an Obermatt Sentiment Rank of 93 (better than 93% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Applied Materials is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Applied Materials. Analyst Opinions are at a rank of 55 (better than 55% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 52, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Applied Materials. The Professional Investors rank is 94, which means that currently, professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 76 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 76% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 93 (more positive than 93% compared with investment alternatives), Applied Materials has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Applied Materials stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Applied Materials Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 79 (better than 79% compared with alternatives) for 2024, Applied Materials shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Applied Materials. Price-to-Profit (also referred to as price-earnings, P/E) is 65 which means that the stock price compared with what market professionals expect for future profits is lower than for 65% of comparable companies, indicating a good value concerning Applied Materials's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 17, which means that the stock price is lower as regards to invested capital than for 17% of comparable investments. On the other hand, Price-to-Sales is less favorable than 71% of alternatives (only 29% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 13% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 79, is a buy recommendation based on Applied Materials's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Applied Materials Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Applied Materials shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Applied Materials. Profit Growth has a rank of 65 which means that currently professionals expect the company to grow its profits more than 65% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 65, and Stock Returns has a rank of 91 which means that the stock returns have recently been above 91% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 27 (73% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Applied Materials Debt Financing Safety risky
| SAFETY METRICS | July 4, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 23 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 65 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 23 |
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ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company Applied Materials has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Applied Materials is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Applied Materials. Liquidity is at 65, meaning the company generates more profit to service its debt than 65% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 23, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 77% of its competitors. Leverage is also high at a rank of 36, which means that the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), Applied Materials has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Applied Materials Above-Average Financial Performance
| COMBINED PERFORMANCE | July 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 79 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| COMBINED | ||||||||
| COMBINED | 71 |
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ANALYSIS: With an Obermatt Combined Rank of 71 (better than 71% compared with investment alternatives), Applied Materials (Semiconductor Equipment, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Applied Materials are a good value (attractively priced) with a consolidated Value Rank of 79 (better than 79% of alternatives), show above-average growth (Growth Rank of 71) but are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 71, is a buy recommendation based on Applied Materials's financial characteristics. As the company Applied Materials's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 79) and above-average growth (Obermatt Growth Rank of 71), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 23) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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