Using the industry peer median P/E multiple (trailing + forward), Applied Materials, Inc. (AMAT) has a fair value of $338.24 based on 7 comparable companies in the Semiconductors industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| Applied Materials, Inc.AMAT | 274,696 | 39.3x | 36.3x |
| Micron Technology, Inc.MU | 430,894 | 50.3x | 6.9x |
| Lam Research CorporationLRCX | 266,600 | 51.4x | 53.2x |
| KLA CorporationKLAC | 192,316 | 48.2x | 40.0x |
| Texas Instruments IncorporatedTXN | 177,859 | 35.8x | 30.4x |
| QUALCOMM IncorporatedQCOM | 140,314 | 26.2x | 11.0x |
| Intuit Inc.INTU | 120,829 | 31.8x | 18.7x |
| ServiceNow, Inc.NOW | 109,061 | 62.4x | 24.9x |
| Industry Median | 48.2x | 24.9x | |
| (*) Profit after tax | 6,998 | 7,571 | |
| Equity Value | 337,268 | 209,323 | |
| (/) Outstanding shares | 808 | 808 | |
| Fair Price | $417 | $259 | |
This P/E relative valuation uses the industry peer median Price-to-Earnings ratio to estimate fair value. Both trailing (last 12 months) and forward (next fiscal year analyst estimates) P/E multiples are computed independently.
The industry median trailing P/E is applied to the company's TTM net income, and the forward P/E to analyst-estimated net income. Each produces an equity value divided by shares outstanding to yield a fair price per share. The selected fair value is the average of the trailing and forward legs.