Asset condition analysis
Applied Materials’ total assets were $30.7 billion and $26.7 billion as of October 29, 2023 and October 30, 2022, respectively.
Long-term investments were $2.28 billion as of October 29, 2023, accounting for 7.4% of total assets.
Property, plant and equipment, net were $2.7 billion as of October 29, 2023, consisting of 8.8% of total assets.
Goodwill was $3.7 billion as of October 29, 2023, making up 12% of total assets.
We are glad that Applied Materials’ operating only need a small amount of fixed assets.
Total current assets were $19.1 billion as of October 29, 2023, comprising 62.2% of total assets.
Total current liabilities were $7.37 billion as of October 29, 2023.
The current ratio was 2.6 times for fiscal 2023.
Total liabilities were $14.23 billion at October 29, 2023.
The debt ratio was 46.4% for fiscal 2023.
In addition, the amount of total current assets can cover total liabilities for fiscal 2023, so the balance sheet was very healthy.
Profitability analysis
Applied Materials’ net sales were $26.5 billion, $25.8 billion and $23 billion in fiscal 2023, 2022 and 2021, respectively.
Net sales in 2023 were up 2.7% year-on-year.
Net sales in 2022 were up 12.2% year-on-year.
Net income was $6.86 billion, $6.5 billion and $5.9 billion in fiscal 2023, 2022 and 2021, respectively.
The company’s net profit margin was 25.9%, 25.2% and 25.7% in fiscal 2023, 2022 and 2021, respectively.
Total stockholders’ equity was $16.3 billion and $12.2 billion at October 29, 2023 and October 30, 2022, respectively.
The return on equity was 42% and 53.3% for fiscal 2023 and 2022, respectively.
Cash flow analysis
Cash provided by operating activities was $8.7 billion, $5.4 billion and $5.44 billion in fiscal 2023, 2022 and 2021, respectively.
Capital expenditures were $1.1 billion, $787 million and $668 million in fiscal 2023, 2022 and 2021, respectively.
Common stock repurchase were $2.2 billion, $6.1 billion and $3.75 billion in fiscal 2023, 2022 and 2021, respectively.
Payments of dividends to stockholders were $975 million, $873 million and $838 million in fiscal 2023, 2022 and 2021, respectively.
Applied Materials’ operating results for Q1 2024.
Net sales were $6.7 billion and $6.74 billion in the three months ended January 28, 2024 and the three months ended January 29, 2022, respectively.
Net income was $2 billion and $1.7 billion for the three months ended January 28, 2024 and the three months ended January 29, 2023, respectively.
Conclusion
The balance sheet was very healthy and Applied Materials’ profitability was very high with strong cash flow.
The company’s capital expenditures were very low.
Applied Materials stock price is $219.95 per share, which is equivalent to $182.76 billion in market capitalization.
We reckon that the reasonable valuation is about $100 billion and Applied Materials stock price is overvalued.
Disclaimer: The content is for reference only and does not constitute an investment.
Introduction
Incorporated in 1967, Applied Materials, Inc. (Applied, we, us and our) is a Delaware corporation. A global company with a broad set of capabilities in materials engineering, we provide manufacturing equipment, services and software to the semiconductor, display and related industries. With our diverse technology capabilities, we deliver products and services that improve device performance, power, yield and cost. Our customers include manufacturers of semiconductor chips, liquid crystal and organic light-emitting diode (OLED) displays, and other electronic devices. These customers may use what they manufacture in their own end products or sell the items to other companies for use in electronic products. Our fiscal year ends on the last Sunday in October.
We operate in three reportable segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets.
