Semiconductors · NASDAQ
Current Price
$382.59
Intrinsic Value
Use the calculator below to estimate
Run a PE ratio stock valuation on Applied Materials, Inc. with auto-filled earnings data, adjustable target PE, and instant fair value estimate.
Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices. The company operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. Applied Materials, Inc. was incorporated in 1967 and is headquartered in Santa Clara, California.
Earnings Yield
2.58%
ROE (TTM)
38.9%
Based on trailing twelve-month data, AMAT has earnings per share of N/A and trades at a PE ratio of N/A. These are key inputs for stock valuation using the PE ratio method.
The trailing twelve-month PE ratio of AMAT reflects how much investors pay per dollar of Applied Materials, Inc.'s earnings. This metric is most useful when compared to Semiconductors peers and the company's own historical range.
Whether AMAT is overvalued depends on comparing its PE ratio to Semiconductors peers, historical averages, and growth expectations. A PE above the sector average may indicate overvaluation, but high-growth companies often command premium multiples. Consider pairing PE analysis with a DCF model for a more complete picture.
To value Applied Materials, Inc. using PE: (1) Compare the current PE against the Semiconductors median to assess relative pricing, (2) check the PEG ratio to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
The PEG ratio divides the PE ratio by the expected earnings growth rate, providing a growth-adjusted valuation metric. A PEG below 1.0 may indicate undervaluation relative to growth, while above 2.0 may suggest overvaluation. PEG is most reliable for companies with stable, predictable earnings growth.
PE ratio gives a quick relative read — how AMAT is priced versus Semiconductors peers. DCF provides an absolute value based on projected free cash flows. For AMAT, with a strong ROE of 38.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
