Applied Materials Inc. (NASDAQ:AMAT)

Price to Earnings (P/E) Ratio

The P/E ratio experienced moderate fluctuations over the observed periods. It initially increased from 20.25 in 2019 to a peak of 22.31 in 2020, then slightly declined to 22.05 in 2021. A significant decrease to 13.55 occurred in 2022, followed by a recovery to approximately 19.6 in the subsequent two years. This pattern suggests variations in market valuation relative to earnings, with a notable dip in 2022 possibly indicating either improved earnings or market adjustments.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio mirrored the P/E trend to some extent. Starting at 16.36 in 2019, it climbed to 18.85 by 2021 before sharply dropping to 11.35 in 2022. It then rebounded to levels near 17.5 in 2023 and 2024. This indicates a similar dynamic in valuation relative to operating profits, with 2022 again representing a period of lower valuation multiples.

Price to Sales (P/S) Ratio

The P/S ratio showed a generally upward trend from 3.75 in 2019, reaching 5.63 in 2021. It decreased notably to 3.43 in 2022, followed by a renewed upward trend to around 5.07 in the last two years. The dip in 2022 suggests a temporary reduction in valuation relative to sales, consistent with the trends observed in profit-based ratios.

Price to Book Value (P/BV) Ratio

The P/BV ratio increased substantially from 6.67 in 2019 to a peak of 10.6 in 2021, followed by a decline to 7.25 in 2022. In 2023, it rose again to 8.23 before settling back to 7.25 in 2024. This exhibits greater volatility compared to other ratios and reflects fluctuations in market valuation relative to the book value of equity, with the most pronounced peak occurring in 2021.

Overall Trends and Insights

Across all valuation metrics, a common pattern emerges: an increase or peak in ratios around 2020-2021, a significant decline in 2022, and a partial recovery afterward. This suggests that the market’s valuation of the company relative to earnings, profits, sales, and book value was highest in the early 2020s, faced a downturn in 2022, and then stabilized at moderately high levels. The 2022 dip may reflect broader economic or sector-specific challenges affecting investor sentiment or company performance. The subsequent rebound indicates renewed investor confidence or improved fundamentals.

The financial data reflects several notable trends over the six-year period.

Share Price

The share price exhibits a generally upward trajectory, increasing from $59.87 in 2019 to $169.35 in 2024. There was a sharp rise between 2020 and 2021, reaching $146.15, followed by a decline in 2022 to $104.73. Subsequently, the price rebounded and reached its peak value in 2024. This pattern indicates periods of volatility but an overall positive equity valuation growth.

Earnings Per Share (EPS)

EPS has shown consistent growth each year, rising from $2.96 in 2019 to $8.82 in 2024. The rate of increase slowed somewhat after 2021 but continued to advance steadily. This upward EPS trend suggests improving profitability and operational performance over time.

Price-to-Earnings (P/E) Ratio

The P/E ratio fluctuates with stock price and earnings changes. It started at 20.25 in 2019, peaked near 22 in 2020 and 2021, then experienced a significant drop to 13.55 in 2022, before rising again to values just under 20 in the most recent years. This variation reflects changing investor valuation perspectives—initially optimistic, then more cautious during the mid-period, and regaining confidence later.

Overall, the company shows strong and consistent earnings growth, while the share price reflects this trend but with more pronounced short-term fluctuations. The P/E ratio variation suggests shifts in market sentiment and valuation multiples over time. The data implies a favorable long-term financial outlook with possible interim volatility risks.

Share Price Trends

The share price experienced a notable upward trajectory over the analyzed periods. Beginning at 59.87 US dollars in late 2019, the price increased substantially to 88.3 US dollars by late 2020. This momentum continued with a significant jump to 146.15 US dollars in late 2021. There was a decline in 2022, bringing the price down to 104.73 US dollars. However, the price rebounded strongly in the subsequent years, reaching 161.95 US dollars in late 2023 and further increasing to 169.35 US dollars by late 2024. Overall, the share price more than doubled from the starting period to the last.

Operating Profit Per Share (OP/Share)

The operating profit per share exhibited consistent growth throughout the periods reviewed. Starting from 3.66 US dollars in late 2019, it rose steadily each year: 4.77 US dollars in 2020, 7.75 in 2021, and peaking at 9.23 US dollars in 2022. The value stabilized around 9.21 in 2023 before achieving a slight increase to 9.67 US dollars in 2024. This upward trend indicates improving operational profitability on a per-share basis.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio showed some volatility over the periods. Initially, it increased from 16.36 in late 2019 to 18.5 in 2020 and slightly to 18.85 in 2021, reflecting higher market valuation relative to operating profits. In 2022, the ratio declined sharply to 11.35, suggesting a more favorable price relative to operating profit, potentially due to the dip in share price. Subsequently, the ratio rose again to 17.58 in 2023 and slightly decreased to 17.52 in 2024, indicating a restoration of valuation closer to prior levels. This pattern reflects the market's fluctuating valuation sensitivity to changes in operating profit and share price.

The analysis of the financial data over the six-year period reveals notable trends in share price, sales per share, and price-to-sales (P/S) ratio.

Share Price (US$)

The share price demonstrates a general upward trend from October 2019 to October 2024, increasing from $59.87 to $169.35. The price nearly tripled over five years, with a significant jump between 2020 and 2021, rising from $88.30 to $146.15. There was a decrease in 2022 to $104.73, before climbing again sharply in the subsequent two years to reach the highest level in October 2024.

Sales Per Share (US$)

Sales per share steadily increased each year, moving from $15.96 in 2019 to $33.40 in 2024. This represents more than a doubling over the time period. The growth in sales per share is consistent and positive, indicating improved revenue generation per share over the years.

Price-to-Sales (P/S) Ratio

The P/S ratio exhibits some volatility despite the overall growth in share price and sales per share. It increased from 3.75 in 2019 to a peak of 5.63 in 2021, reflecting a higher market valuation relative to sales. However, it dropped sharply to 3.43 in 2022, indicating a correction or a more conservative market valuation at that time. In the following years, the ratio recovered to around 5.08 and 5.07 in 2023 and 2024 respectively, stabilizing near the earlier peak levels.

In summary, the company's financial indicators illustrate strong and consistent growth in sales per share and share price over the analyzed period, notwithstanding a temporary dip in share price and P/S ratio in 2022. The stabilization of the P/S ratio above 5 towards the end of the period suggests sustained investor confidence in the company’s sales performance relative to its market valuation.

The analysis of the financial data reveals several notable trends regarding the company's market valuation and book value over the analyzed periods.

Share price

The share price shows a general upward trajectory from 2019 to 2024. Beginning at $59.87 in 2019, it increased significantly to $88.30 in 2020 and further surged to $146.15 in 2021. However, a decline occurred in 2022, with the price dropping to $104.73. Subsequently, the share price recovered and reached a new peak of $161.95 in 2023, continuing to rise moderately to $169.35 in 2024. This pattern implies some volatility, particularly the dip experienced in 2022, but overall strong growth over the six-year span.

Book value per share (BVPS)

BVPS has steadily increased throughout the period under review, indicating growth in the company's net asset value per share. Starting at $8.97 in 2019, it rose year-over-year to reach $23.35 by 2024. This consistent increase in book value suggests improved balance sheet strength and enhanced shareholder equity.

Price-to-Book Value ratio (P/BV)

The P/BV ratio exhibits variability over the years. It started at 6.67 in 2019, increased to a peak of 10.60 in 2021 coinciding with the share price peak, then sharply decreased to 7.25 in 2022. The ratio rose again in 2023 to 8.23 but dropped back to 7.25 in 2024. These fluctuations indicate changes in market sentiment relative to the company's book value, with the highest overvaluation relative to book value in 2021 and stabilization thereafter.

In summary, the company's share price has generally strengthened with a temporary decline in 2022, while book value per share has shown continuous improvement. The price-to-book ratio variation suggests shifts in investor perception about the company's value relative to its net assets, with notable moderation after 2021.