Applied Materials (NASDAQ:AMAT) Shares Down 7.5% - Here's What Happened

Key Points

• Applied Materials shares fell 7.5% to about $390.09 in heavy trading, with roughly 10.2 million shares changing hands—30% above average volume.
• Despite the sell-off, analysts maintained a generally positive view: 30 rate the stock Buy and nine rate it Hold, producing a “Moderate Buy” consensus and a $632.70 average price target.
• The company recently reported quarterly EPS and revenue above expectations, while declaring a $0.53 quarterly dividend. Insiders have sold 9,225 shares worth about $4.45 million over the past three months.

Applied Materials, Inc. (NASDAQ:AMAT - Get Free Report) dropped 7.5% during mid-day trading on Friday. The stock traded as low as $382.62 and last traded at $390.09. Approximately 10,240,768 shares were traded during mid-day trading, an increase of 30% from the average daily volume of 7,880,454 shares. The stock had previously closed at $421.66.

Analyst Ratings Changes

A number of brokerages have commented on AMAT. Needham & Company LLC dropped their target price on shares of Applied Materials from $740.00 to $580.00 and set a "buy" rating on the stock in a research note on Friday, October 16th. Bank of America reduced their price objective on shares of Applied Materials from $720.00 to $650.00 and set a "buy" rating for the company in a research note on Friday, August 14th. Citigroup reissued a "buy" rating and issued a $710.00 price objective (up from $550.00) on shares of Applied Materials in a research report on Monday, August 3rd. Evercore set a $590.00 target price on Applied Materials in a research note on Thursday, October 15th. Finally, UBS Group increased their price target on Applied Materials from $675.00 to $695.00 and gave the company a "buy" rating in a research note on Tuesday, September 1st. Thirty equities research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus price target of $632.70.

Applied Materials Stock Performance

The stock has a market capitalization of $309.58 billion, a price-to-earnings ratio of 33.63, a price-to-earnings-growth ratio of 1.16 and a beta of 1.60. The firm has a fifty day moving average of $459.78 and a 200 day moving average of $443.21. The company has a debt-to-equity ratio of 0.20, a current ratio of 2.42 and a quick ratio of 1.79.

Applied Materials (NASDAQ:AMAT - Get Free Report) last posted its earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.40 by $0.10. The firm had revenue of $9.12 billion during the quarter, compared to analysts' expectations of $8.99 billion. Applied Materials had a net margin of 30.05% and a return on equity of 38.02%. The business's revenue was up 24.8% compared to the same quarter last year. During the same period in the previous year, the business posted $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. On average, sell-side analysts anticipate that Applied Materials, Inc. will post 12.79 earnings per share for the current fiscal year.

Applied Materials Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, December 10th. Investors of record on Thursday, November 19th will be given a dividend of $0.53 per share. This represents a $2.12 annualized dividend and a dividend yield of 0.5%. The ex-dividend date is Thursday, November 19th. Applied Materials's dividend payout ratio is 18.28%.

Insider Activity at Applied Materials

In other Applied Materials news, CAO Adam Sanders sold 725 shares of the stock in a transaction that occurred on Friday, October 2nd. The stock was sold at an average price of $544.56, for a total transaction of $394,806.00. Following the completion of the transaction, the chief accounting officer owned 3,181 shares of the company's stock, valued at $1,732,245.36. This represents a 18.56% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Brice Hill sold 7,500 shares of the stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $479.25, for a total value of $3,594,375.00. Following the transaction, the chief financial officer directly owned 128,613 shares of the company's stock, valued at $61,637,780.25. The trade was a 5.51% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 9,225 shares of company stock valued at $4,454,181. 0.30% of the stock is owned by corporate insiders.

Institutional Trading of Applied Materials

A number of institutional investors have recently made changes to their positions in the company. Harborfront Financial Group LLC purchased a new stake in Applied Materials in the second quarter valued at approximately $27,000. Financial Freedom LLC purchased a new position in shares of Applied Materials during the first quarter worth approximately $28,000. Curry Webb Wealth Management LLC purchased a new position in shares of Applied Materials during the third quarter worth approximately $30,000. Dakota Community Bank & Trust NA acquired a new position in shares of Applied Materials in the 3rd quarter valued at $31,000. Finally, Orion Capital Management LLC acquired a new position in shares of Applied Materials in the 2nd quarter valued at $33,000. 80.56% of the stock is owned by institutional investors and hedge funds.

Applied Materials Company Profile

Applied Materials, Inc is a technology company that supplies equipment, services and software used to manufacture semiconductors and advanced displays. Its products help customers fabricate the integrated circuits and other components used in computers, mobile devices, data centers, automobiles and a range of connected technologies.

The company's offerings include systems for materials engineering, wafer fabrication, inspection and process control, along with equipment and services designed to improve manufacturing productivity and yield.

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