Applied Materials Q4 Earnings Report Preview: What To Look For

Adam Hejl /
2022/02/15 6:39 am EST
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Maker of machinery employed in semiconductor manufacturing, Applied Materials (NASDAQ:AMAT) will be reporting earnings tomorrow after market close. Here's what investors should know.

Last quarter Applied Materials reported revenues of $6.12 billion, up 30.6% year on year, missing analyst expectations by 3.33%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.

Is Applied Materials buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Applied Materials' revenue to grow 19.3% year on year to $6.16 billion, down from the 24% year-over-year increase in revenue the company had recorded in the same quarter last year. Earnings are expected to come in at $1.85 per share.

Applied Materials Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

Looking at Applied Materials' peers in the semiconductors segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Lam Research Corporation (NASDAQ:LRCX) delivered top-line growth of 51.3% year on year, missing analyst estimates by 4.27% and NXP Semiconductors (NASDAQ:NXPI) reported revenues up 21.2% year on year, exceeding estimates by 1.19%. Lam Research Corporation traded down 7.03% on results, NXP Semiconductors was up 1.38%. Read our full analysis of Lam Research Corporation's results here and NXP Semiconductors's results here.

Technology stocks have been hit hard on fears of higher interest rates and while some of the semiconductors stocks have fared somewhat better, they have not been spared, with share price declining 9.59% over the last month. Applied Materials is down 14.1% during the same time, and is heading into the earnings with analyst price target of $171.8, compared to share price of $130.85.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.