Let's talk about the popular Applied Materials, Inc. (NASDAQ:AMAT). The company's shares received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$214 at one point, and dropping to the lows of US$165. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Applied Materials' current trading price of US$165 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Applied Materials’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Applied Materials
What's The Opportunity In Applied Materials?
Good news, investors! Applied Materials is still a bargain right now. According to our valuation, the intrinsic value for the stock is $232.11, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Applied Materials’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Applied Materials look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 26% over the next couple of years, the future seems bright for Applied Materials. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since AMAT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on AMAT for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AMAT. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
It can be quite valuable to consider what analysts expect for Applied Materials from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.
If you are no longer interested in Applied Materials, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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