Using the PEG framework with analyst consensus forward EPS growth of 20.3% plus 0.5% dividend yield, Applied Materials, Inc. has a fair value of $223.65 based on NTM EPS (FY2026) of $11.03. The current PEG ratio is 1.52.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG is most informative for high-growth companies — the PEG sweet spot.
| EPS Growth RateForward | 19.8% |
| Dividend Yield | +0.5% |
| Adjusted Growth (clamped 8–25%) | 20.3% |
| Fair P/E | 20.3x |
| NTM EPS (FY2026) | $11.03 |
| Fair Value | $223.65 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $8.66 | — | — |
| FY2026E | $11.03 | +27.4% | 24 |
| FY2027E | $13.94 | +26.4% | 24 |
| FY2028E | $15.51 | +11.2% | 14 |
| FY2029E | $17.82 | +14.9% | 7 |
4Y Forward EPS CAGR: 19.8%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $5.9B | $6.40 | — |
| FY2022 | $6.5B | $7.44 | +16.3% |
| FY2023 | $6.9B | $8.11 | +9.0% |
| FY2024 | $7.2B | $8.61 | +6.2% |
| FY2025 | $7.0B | $8.66 | +0.6% |
4Y Historical EPS CAGR: 7.9%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.