Semiconductors & Related Devices
Applied Materials, Inc. engages in the provision of 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.
Discounted Cash Flow Valuation of Applied Materials Inc
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +22.2%.
The trend of Net Margin over the past 5 years is +0.85%.
The average ROA over the past 5 years is +23.65%.
The trend of ROA over the past 5 years is +1.22%.
The average ROE over the past 5 years is +42.32%.
The trend of ROE over the past 5 years is +2.4%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 0.81.
The trend of Debt/FCF over the past 5 years is -0.13.
Graham’s Stability measure stands at 0.96.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +12.14%.
The trend of Revenue growth rate over the past 5 years is +0.76%.
The Earnings CAGR over the past 5 years is +13.7%.
The trend of Earnings growth rate over the past 5 years is -1.75%.
The Equity CAGR over the past 5 years is +5.46%.
The trend of Equity growth rate over the past 5 years is +2.01%.
The FCF CAGR over the past 5 years is +7.16%.
The trend of FCF growth rate over the past 5 years is -3.57%.