Applied Materials (Nasdaq: AMAT) the semiconductor equipment manufacturer reported Q2 2020 results that were in-line with analyst estimates. The stock is down -2% in after hours trading.

Revenue came in at $3.96 billion, which beat analyst estimates of $3.98 billion (-1% vs consensus).  Revenue growth was +12% year-over-year.

EPS came in at $0.89/share, topping analyst estimates of $0.88/share (+1% vs. consensus).

Wall Street’s sales estimates for Q2 have been cut by 7% since the coronavirus pandemic began.  The CEO Gary Dickerson stated in the press release that “based on the visibility we have today, our supply chain is recovering, and underlying demand for our semiconductor equipment and services remains robust”.

Source: YCharts

Applied Material’s operating margin came in at 23.6% for the quarter, a year-on-year improvement of 1.7%.  AMAT’s operating margin is lower than it’s peers; Intel and Nvidia.

Quarterly Operating Margins

Source: YCharts

Applied Materials trades at a 25% discount on a forward price-to-sales compared to it’s multiple at the start of 2020 (3x vs. 4x), and effectively in-line with this peers Intel and Micron.  Nvidia remains the darling of the group, trading at a 15x forward price-to-sales.

Forward Price-to-Sales Ratio

Source: YCharts


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