Shares of materials engineering solutions provider Applied Materials, Inc. (AMAT) declined 1.1% to close at $127.80 in Thursday’s extended trade despite its better-than-expected results for the third quarter ended August 1, 2021. Growth in net sales paved way for the company’s solid results.
Quarterly net sales jumped 41% year-over-year from $4.4 billion to $6.2 billion, surpassing the Street’s estimate of $5.94 billion. This growth was mainly due to a 52.7% year-over-year rise in net sales from Semiconductor Systems.
The company reported earnings per share (EPS) of $1.90 in the third quarter of fiscal 2021, which was up 79% from the year-ago period. Analysts had estimated earnings of $1.77 per share.
In some other key metrics, the company’s gross margin and operating margin for the quarter stood at 47.9% and 32.5%, respectively. The company had reported a gross margin of 44.5% and an operating margin of 25.2% last year.
The CEO of Applied Materials, Gary Dickerson, said, “Applied Materials delivered record performance as long-term trends fueled by the digital transformation of the economy drive strong, secular demand for semiconductors. Applied has the broadest and most enabling portfolio of technologies to accelerate our customers’ roadmaps, putting us in a great position to outperform our markets again in 2021 and the years ahead.” (See Applied Materials stock chart on TipRanks)
On August 19, Susquehanna analyst Mehdi Hosseini reiterated a Buy rating on the stock with a price target of $170, which implies 31.6% upside potential from current levels.
Consensus among analysts is a Strong Buy based on 8 Buys and 2 Holds. The average Applied Materials price target of $157.3 implies 21.8% upside potential.
Applied Materials scores a 7 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations. Shares have gained 102.5% over the past year.
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