Comparing Applied Mat With Industry Competitors In Semiconductors & Semiconductor Equipment Industry

In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Applied Mat AMAT vis-à-vis its key competitors in the Semiconductors & Semiconductor Equipment industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in the industry.

Applied Mat Background

Applied Materials is the largest semiconductor wafer fabrication equipment, or WFE, manufacturer in the world. Applied Materials has a broad portfolio spanning nearly every corner of the WFE ecosystem. Specifically, Applied Materials holds a market share leadership position in deposition, which entails the layering of new materials on semiconductor wafers. It is more exposed to general-purpose logic chips made at integrated device manufacturers and foundries. It counts the largest chipmakers in the world as customers, including TSMC, Intel, and Samsung.

Upon analyzing Applied Mat, the following trends can be observed:

• With a Price to Earnings ratio of 18.21, which is 0.34x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• The elevated Price to Book ratio of 7.56 relative to the industry average by 1.14x suggests company might be overvalued based on its book value.

• The Price to Sales ratio is 4.71, which is 0.97x the industry average. This suggests a possible undervaluation based on sales performance.

• The company has a higher Return on Equity (ROE) of 12.75%, which is 7.08% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $2.36 Billion is 7.37x above the industry average, highlighting stronger profitability and robust cash flow generation.

• The gross profit of $3.17 Billion is 6.47x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 4.64% is notably higher compared to the industry average of -2.94%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When assessing Applied Mat against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• Applied Mat exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.34.

• This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.

Key Takeaways

The valuation analysis for Applied Mat in the Semiconductors & Semiconductor Equipment industry indicates that the company has a low PE ratio, suggesting that its stock price is relatively low compared to its earnings. The high PB ratio indicates that the company's stock price is high compared to its book value. The low PS ratio suggests that the company's stock price is low compared to its revenue. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth indicate that Applied Mat is performing well in terms of profitability and growth compared to its peers in the industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.