AMAT PE Ratio & Valuation,Is AMAT Overvalued

AMAT Relative Valuation

AMAT's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, AMAT is overvalued; if below, it's undervalued.

Historical Valuation

Applied Materials Inc (AMAT) is now in the Overvalued zone, suggesting that its current forward PE ratio of 28.28 is considered Overvalued compared with the five-year average of 18.69. The fair price of Applied Materials Inc (AMAT) is between 190.06 to 252.24 according to relative valuation methord. Compared to the current price of 292.20 USD , Applied Materials Inc is Overvalued By 15.84%.

Relative Value

Fair Zone

190.06-252.24

Current Price：292.20

15.84%

Overvalued

28.28

23.12

EV/EBITDA

Applied Materials Inc. (AMAT) has a current EV/EBITDA of 23.12. The 5-year average EV/EBITDA is 15.32. The thresholds are as follows: Strongly Undervalued below 9.19, Undervalued between 9.19 and 12.26, Fairly Valued between 18.39 and 12.26, Overvalued between 18.39 and 21.46, and Strongly Overvalued above 21.46. The current Forward EV/EBITDA of 23.12 falls within the Strongly Overvalued range.

24.61

EV/EBIT

Applied Materials Inc. (AMAT) has a current EV/EBIT of 24.61. The 5-year average EV/EBIT is 16.23. The thresholds are as follows: Strongly Undervalued below 9.57, Undervalued between 9.57 and 12.90, Fairly Valued between 19.55 and 12.90, Overvalued between 19.55 and 22.88, and Strongly Overvalued above 22.88. The current Forward EV/EBIT of 24.61 falls within the Strongly Overvalued range.

7.38

Applied Materials Inc. (AMAT) has a current PS of 7.38. The 5-year average PS is 4.80. The thresholds are as follows: Strongly Undervalued below 2.84, Undervalued between 2.84 and 3.82, Fairly Valued between 5.79 and 3.82, Overvalued between 5.79 and 6.77, and Strongly Overvalued above 6.77. The current Forward PS of 7.38 falls within the Strongly Overvalued range.

28.10

P/OCF

Applied Materials Inc. (AMAT) has a current P/OCF of 28.10. The 5-year average P/OCF is 17.23. The thresholds are as follows: Strongly Undervalued below 9.48, Undervalued between 9.48 and 13.35, Fairly Valued between 21.10 and 13.35, Overvalued between 21.10 and 24.97, and Strongly Overvalued above 24.97. The current Forward P/OCF of 28.10 falls within the Strongly Overvalued range.

37.32

P/FCF

Applied Materials Inc. (AMAT) has a current P/FCF of 37.32. The 5-year average P/FCF is 20.15. The thresholds are as follows: Strongly Undervalued below 10.01, Undervalued between 10.01 and 15.08, Fairly Valued between 25.22 and 15.08, Overvalued between 25.22 and 30.29, and Strongly Overvalued above 30.29. The current Forward P/FCF of 37.32 falls within the Strongly Overvalued range.

Applied Materials Inc (AMAT) has a current Price-to-Book (P/B) ratio of 10.44. Compared to its 3-year average P/B ratio of 8.15 , the current P/B ratio is approximately 28.12% higher. Relative to its 5-year average P/B ratio of 8.51, the current P/B ratio is about 22.75% higher. Applied Materials Inc (AMAT) has a Forward Free Cash Flow (FCF) yield of approximately 2.67%. Compared to its 3-year average FCF yield of 4.61%, the current FCF yield is approximately -41.97% lower. Relative to its 5-year average FCF yield of 4.61% , the current FCF yield is about -41.98% lower.

10.44

P/B

Median3y

8.15

Median5y

8.51

2.67

FCF Yield

Median3y

4.61

Median5y

4.61

Competitors Valuation Multiple

The average P/S ratio for AMAT's competitors is 5.39, providing a benchmark for relative valuation. Applied Materials Inc Corp (AMAT) exhibits a P/S ratio of 7.38, which is 36.93% above the industry average. Given its robust revenue growth of -3.48%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

Revenue Growth

Market Cap

Performance Decomposition

Market capitalization of AMAT increased by 62.02% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 20.43 to 31.05.

The secondary factor is the Margin Expansion, contributed 13.55%to the performance.

Overall, the performance of AMAT in the past 1 year is driven by P/E Change. Which is more unsustainable.

-3.48%

7.05B → 6.80B

Revenue Growth

13.55%

24.57 → 27.90

Margin Expansion

51.95%

20.43 → 31.05

P/E Change

62.02%

180.35 → 292.20

Mkt Cap Growth

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Frequently Asked Questions

Is Applied Materials Inc (AMAT) currently overvalued or undervalued?

What is Applied Materials Inc (AMAT) fair value?

AMAT's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average , adjusted by weights. The fair price of Applied Materials Inc (AMAT) is between 190.06 to 252.24 according to relative valuation methord.

How does AMAT's valuation metrics compare to the industry average?

What is the current P/B ratio for Applied Materials Inc (AMAT) as of Jan 08 2026?

As of Jan 08 2026, Applied Materials Inc (AMAT) has a P/B ratio of 10.44. This indicates that the market values AMAT at 10.44 times its book value.

What is the current FCF Yield for Applied Materials Inc (AMAT) as of Jan 08 2026?

As of Jan 08 2026, Applied Materials Inc (AMAT) has a FCF Yield of 2.67%. This means that for every dollar of Applied Materials Inc’s market capitalization, the company generates 2.67 cents in free cash flow.

What is the current Forward P/E ratio for Applied Materials Inc (AMAT) as of Jan 08 2026?

As of Jan 08 2026, Applied Materials Inc (AMAT) has a Forward P/E ratio of 28.28. This means the market is willing to pay $28.28 for every dollar of Applied Materials Inc’s expected earnings over the next 12 months.

What is the current Forward P/S ratio for Applied Materials Inc (AMAT) as of Jan 08 2026?

As of Jan 08 2026, Applied Materials Inc (AMAT) has a Forward P/S ratio of 7.38. This means the market is valuing AMAT at $7.38 for every dollar of expected revenue over the next 12 months.

AMAT Valuation