Complete AMAT Stock Valuation Analysis
Comprehensive intrinsic value analysis using 7 different methodologies
AMAT DCF Analysis
AMAT (Applied Materials, Inc.) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $25.8B | $26.5B | $27.2B | $29.2B | $31.2B | $33.2B | $35.0B | $36.8B |
| Revenue Growth % | - | 2.8% | 2.5% | 7.6% | 6.9% | 6.2% | 5.6% | 5.0% |
| EBIT | $7.8B | $7.7B | $7.9B | $8.6B | $9.2B | $9.8B | $10.4B | $10.9B |
| EBIT Margin % | 30.2% | 28.9% | 28.9% | 29.3% | 29.4% | 29.5% | 29.6% | 29.7% |
| Tax Rate % | 14.1% | 11.1% | 12.0% | 12.7% | 13.9% | 15.1% | 16.4% | 17.6% |
| NOPAT | $6.7B | $6.8B | $6.9B | $7.5B | $7.9B | $8.3B | $8.7B | $9.0B |
| NOPAT Margin % | 25.9% | 25.6% | 25.5% | 25.6% | 25.3% | 25.1% | 24.8% | 24.5% |
| Capex | $787.0M | $1.1B | $1.2B | $991.5M | $1.0B | $1.0B | $1.0B | $1.0B |
| Capex / Revenue % | 3.1% | 4.2% | 4.4% | 3.4% | 3.2% | 3.1% | 2.9% | 2.8% |
| Depreciation | $444.0M | $515.0M | $392.0M | $497.8M | $531.9M | $564.7M | $596.1M | $625.8M |
| D&A / Revenue % | 1.7% | 1.9% | 1.4% | 1.7% | 1.7% | 1.7% | 1.7% | 1.7% |
| Change in NWC | $-1.2B | $3.2B | $977.0M | $188.2M | $160.9M | $136.6M | $115.4M | $96.9M |
| NWC Change / Revenue % | -4.7% | 12.2% | 3.6% | 0.6% | 0.5% | 0.4% | 0.3% | 0.3% |
| Unlevered FCF | $7.6B | $3.0B | $5.2B | $6.8B | $7.3B | $7.7B | $8.1B | $8.5B |
| UFCF % Chg. | - | -60.6% | 72.8% | 32.2% | 7.0% | 6.1% | 5.3% | 4.7% |
| FCF / Revenue % | 29.3% | 11.2% | 19.0% | 23.3% | 23.3% | 23.3% | 23.3% | 23.2% |
| Discount Factor | - | - | - | 0.900 | 0.809 | 0.728 | 0.655 | 0.589 |
| Present Value of FCF | - | - | - | $6.1B | $5.9B | $5.6B | $5.3B | $5.0B |
| Sum of PV of UFCF | - | - | - | $6.1B | $12.0B | $17.7B | $23.0B | $28.0B |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 4.7% |
| Tax Rate | 12.7% |
| After Tax Cost of Debt | 4.1% |
| Risk Free Rate | 4.24% |
| Market Risk Premium | 4.3% |
| Beta | 1.66 |
| Cost of Equity | 11.4% |
| Total Debt | $6.3B |
| Market Cap | $148.1B |
| Total Capital | $154.4B |
| Debt Weighting | 4.1% |
| Equity Weighting | 95.9% |
| WACC | 11.1% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $8.5B |
| Terminal Value | $101.0B |
| PV of Terminal Value | $59.5B |
| Cumulative PV of UFCF | $28.0B |
| Net Debt | $-1.8B |
| Equity Value | $89.3B |
| Shares Outstanding | 834.0M |
| Implied Share Price | $107 |
| Current Share Price | $185 |
| Implied Upside/(Downside) | -42.0% |
Valuation Summary
$107.09
Implied Price
$184.56
Current Price
-42.0%
Upside/Downside
11.1%
WACC
AMAT Dividend Discount Model
AMAT dividend discount model based on historical dividend payments and projected dividend growth rates
DDM Method Selection
Model Assumptions
Historical 5Y CAGR: 16.5%
Cost of equity (risk-free rate + equity risk premium)
Valuation Result
$0.00
Intrinsic Value
$184.56
Current Price
-100.0%
Upside/Downside
Medium Confidence
Dividend History & Growth Analysis
| Period | Dividend per Share | YoY Growth | Growth Rate | Period Type |
|---|---|---|---|---|
2025Q3 2024 - Q3 2025 | $1.66Current | $0.30 | +22.1% | TTM |
2024Q3 2023 - Q3 2024 | $1.36 | $0.26 | +23.6% | TTM Historical |
2023Q3 2022 - Q3 2023 | $1.10 | $0.12 | +12.2% | TTM Historical |
2022Q3 2021 - Q3 2022 | $0.98 | $0.08 | +8.9% | TTM Historical |
2021Q3 2020 - Q3 2021 | $0.90 | — | — | TTM Historical |
TTM Analysis
Average Growth Rate: +16.7%
TTM Methodology
This analysis uses Trailing Twelve Months (TTM) windows for consistent 12-month comparisons. Each period represents dividends paid over a rolling 12-month window ending on the same calendar date, eliminating partial fiscal year distortions and providing accurate growth rate calculations.
Calculation Breakdown
Formula:
Error in calculation
Substitution:
Required return must be greater than growth rate for Gordon Growth Model
Result:
$0.00
AMAT Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 10 peer companies in Technology
P/E Ratio
$251.18
+36.1%
Peer Median: 30.3x
EV/EBITDA
$217.72
+18.0%
Peer Median: 19.9x
P/S Ratio
$167.67
-9.2%
Peer Median: 4.8x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for AMAT's business model and current situation.
Multiple Comparison
| Multiple | AMAT Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | 22.3x | 30.3x | 30.6x | -26.5% | Undervalued |
| EV/EBITDA | 16.7x | 19.9x | 18.7x | -16.2% | Fair Value |
| P/S Ratio | 5.3x | 4.8x | 4.7x | 10.1% | Fair Value |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $148.11B | 22.3x | 16.7x | 5.3x | |
| $124.11B | 26.8x | 21.2x | 7.2x | |
| $119.56B | 32.6x | 25.5x | 10.4x | |
| $14.74B | 25.8x | 19.9x | 5.1x | |
| $12.50B | 40.4x | 17.3x | 3.9x | |
| $6.81B | 30.3x | 16.6x | 1.9x | |
| $5.38B | 37.6x | 24.5x | 3.8x | |
| $4.91B | 22.7x | 18.5x | 4.8x | |
| $5.32B | 16.9x | 5.2x | 0.8x | |
| $2.72B | 50.6x | 22.1x | 3.5x |
AMAT Graham Number
Benjamin Graham's conservative valuation formula for defensive investors
Input Data
| EPS (TTM) | $8.29 | Latest 10-K |
| Book Value per Share | $22.78 | Latest 10-K Balance Sheet |
| Graham Constant | 22.5 | Benjamin Graham's formula |
Graham Number Result
$65.20
Intrinsic Value
$184.56
Current Price
-64.7%
Upside/Downside
Confidence: High
Conservative value investing approach
Calculation Breakdown
Formula:
√(22.5 × EPS × BVPS)
Step 1: Multiply constant by EPS
22.5 × 8.29 = 186.57
Step 2: Multiply by Book Value per Share
186.57 × 22.78 = 4250.63
Step 3: Take square root
√4250.63 = 65.20
Graham Number Result:
$65.20
AMAT Graham Intrinsic Value
Growth-adjusted intrinsic value with two formula variants
Formula Selection
V = EPS × (8.5 + 2g)
Graham's original P/E shortcut for growth, no interest-rate adjustment
V = [EPS × (8.5 + 2g) × 4.4] / Y
Graham's 1974 refinement: adds rate-environment sensitivity
Active Formula: Base-Growth
8.29 × (8.5 + 2 × 10.3%)
Input Data & Growth Assumptions
Current EPS (TTM)$8.29
Latest 10-K • 2024-10-27T00:00:00
Historical 3Y10.3%
Financial statements
Historical 5Y24.6%
Financial statements
Custom
%
Enter a positive growth rate estimate (0-50%)
Graham Intrinsic Value Result
$241.14
Intrinsic Value
$184.56
Current Price
+30.7%
Upside/Downside
Base Formula
Growth: 10.3%
AMAT Peter Lynch Fair Value
Growth-based valuation using PEG ratio analysis for growth stocks
Fair Value Calculation
EPS (TTM)$8.29
Latest 10-K • 2024-10-27T00:00:00
Historical 3Y10.3%
3-year earnings growth
Historical 5Y24.6%
5-year earnings growth
10.3%
1%50%
Fair Value Formula: EPS × Growth Rate
$8.29 × 10.3% = $85.33
$85.33
Fair Value
$184.56
Current Price
-53.8%
Upside/Downside
PEG Analysis
22.3x
Current P/E
10.3%
Growth Rate
2.16
PEG Ratio (P/E ÷ Growth Rate)
Significantly Overvalued
PEG Ratio Interpretation:
• PEG < 1.0: Undervalued (growth exceeds P/E)
• PEG = 1.0: Fairly valued (ideal Lynch ratio)
• PEG > 1.5: Overvalued (paying premium for growth)
Peter Lynch's Rule:
"The P/E ratio of any company that's fairly priced will equal its growth rate." A stock with 15% growth should trade at a P/E of 15 (PEG = 1.0).
AMAT Earnings Power Value (EPV)
Normalized earnings-based valuation for sustainable earning power assessment
Earnings Normalization
| Earnings Component | Amount ($B) | Description |
|---|---|---|
| Reported Earnings | 7.2 | Base earnings from financial statements |
| Normalized Earnings | 7.2 | Final normalized earning power |
One-time Items: Remove non-recurring gains/losses
Cyclical Adjustment: Normalize for economic cycle position
EPV Result
$97.93
EPV per Share
$184.56
Current Price
-46.9%
Upside/Downside
8.8%
WACC: 8.8% (calculated from market data)
Confidence: High
Normalized earnings approach
EPV Calculation Breakdown
Enterprise Value Calculation
| Normalized Earnings | $7.2B |
| Cost of Capital | 8.8% |
| Enterprise Value | $81.7B |
Per Share Value
| Enterprise Value | $81.7B |
| Shares Outstanding | 0.8B |
| EPV per Share | $97.93 |
WACC Components
| Cost of Equity | 9.0% |
| After-Tax Cost of Debt | 3.5% |
| Equity Weight | 96.1% |
| Debt Weight | 3.9% |
| WACC | 8.8% |