Is Applied Materials Inc (AMAT) overvalued?
On Equity Rank's model estimate, AMAT trades 22% above its fair value. Applied Materials Inc (AMAT) last closed at $332.72; the multi-method model fair value is $273.60.
| Price | Model fair value | Price vs model |
|---|---|---|
| $332.72 | $273.60 | 22% above |
What the answer rests on
- 1 of 10 valuation methods put AMAT's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, AMAT's free cash flow would need to grow about 23.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 7.3% a year.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 5% above to 199% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind AMAT's fair value · What prices assume · Other companies