AMAT – Market expectations are for Uniform ROA to decline, and management may have concerns about profitability, supply chain constraints, and digital transformation

April 13, 2022

  • Applied Materials (AMAT) currently trades below corporate but near historical averages relative to Uniform earnings, with a 13.9x Uniform P/E (Fwd. V/E’).

  • At these levels, markets are pricing in expectations for Uniform ROA to decline to 21%, accompanied by 7% Uniform asset growth.

  • Meanwhile, analysts expect Uniform ROA to improve to 38% by 2023, accompanied by 9% Uniform asset growth.

  • If sustained going forward, these levels would imply a stock price closer to $254, representing significant potential equity upside for the firm. That said, the firm is unlikely to sustain peak cycle profitability going forward.

  • Moreover, the firm’s most recent earnings call suggests management may have concerns about profitability, supply chain constraints, and digital transformation.

You don’t have access to the Valens Research Premium Application.

To get access to our best content including the highly regarded Conviction Long List and Market Phase Cycle macro newsletter, please contact our Client Relations Team at 630-841-0683 or email

Please fill out the fields below so that our client relations team can contact you

Or contact our Client Relationship Team at 630-841-0683