Stock Analysis on Net

Applied Materials Inc. (NASDAQ:AMAT)

Analysis of Profitability Ratios 

Microsoft Excel

Profitability Ratios (Summary)

Applied Materials Inc., profitability ratios

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Oct 25, 2020 Oct 27, 2019 Oct 28, 2018
Return on Sales
Gross profit margin 46.70% 46.51% 47.32% 44.72% 43.72% 45.31%
Operating profit margin 28.86% 30.20% 29.87% 25.37% 22.93% 27.80%
Net profit margin 25.86% 25.31% 25.53% 21.04% 18.52% 19.20%
Return on Investment
Return on equity (ROE) 41.94% 53.51% 48.08% 34.21% 32.94% 48.44%
Return on assets (ROA) 22.31% 24.41% 22.80% 16.19% 14.22% 18.64%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Applied Materials Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Applied Materials Inc. operating profit margin ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Applied Materials Inc. net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Applied Materials Inc. ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
ROA A profitability ratio calculated as net income divided by total assets. Applied Materials Inc. ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Gross Profit Margin

Applied Materials Inc., gross profit margin calculation, comparison to benchmarks

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Oct 25, 2020 Oct 27, 2019 Oct 28, 2018
Selected Financial Data (US$ in millions)
Gross profit 12,384 11,993 10,914 7,692 6,386 7,817
Net sales 26,517 25,785 23,063 17,202 14,608 17,253
Profitability Ratio
Gross profit margin1 46.70% 46.51% 47.32% 44.72% 43.72% 45.31%
Benchmarks
Gross Profit Margin, Competitors2
Advanced Micro Devices Inc. 46.12% 44.93% 48.25% 44.53% 42.61%
Analog Devices Inc. 64.01% 62.70% 61.83% 65.87% 67.00% 68.27%
Broadcom Inc. 68.93% 66.55% 61.36% 56.58% 55.24% 51.48%
First Solar Inc. 39.19% 2.67% 24.97% 25.10% 17.93%
Intel Corp. 40.04% 42.61% 55.45% 56.01% 58.56%
KLA Corp. 59.81% 61.00% 59.93% 57.81% 59.08%
Lam Research Corp. 44.62% 45.69% 46.53% 45.88% 45.15%
Micron Technology Inc. -9.11% 45.18% 37.62% 30.57% 45.72%
NVIDIA Corp. 56.93% 64.93% 62.34% 61.99% 61.21%
Qualcomm Inc. 55.70% 57.84% 57.51% 60.67% 64.57%
Texas Instruments Inc. 62.90% 68.76% 67.47% 64.10% 63.71%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 12,384 ÷ 26,517 = 46.70%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Applied Materials Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Operating Profit Margin

Applied Materials Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Oct 25, 2020 Oct 27, 2019 Oct 28, 2018
Selected Financial Data (US$ in millions)
Income from operations 7,654 7,788 6,889 4,365 3,350 4,796
Net sales 26,517 25,785 23,063 17,202 14,608 17,253
Profitability Ratio
Operating profit margin1 28.86% 30.20% 29.87% 25.37% 22.93% 27.80%
Benchmarks
Operating Profit Margin, Competitors2
Advanced Micro Devices Inc. 1.77% 5.36% 22.20% 14.02% 9.37%
Analog Devices Inc. 31.07% 27.29% 23.12% 26.74% 28.55% 30.35%
Broadcom Inc. 45.25% 42.84% 31.03% 16.80% 15.24% 24.63%
First Solar Inc. 25.83% -1.04% 20.07% 11.71% -5.28%
Intel Corp. 0.17% 3.70% 24.62% 30.41% 30.62%
KLA Corp. 38.06% 39.67% 35.97% 25.87% 30.41%
Lam Research Corp. 29.69% 31.24% 30.64% 26.62% 25.53%
Micron Technology Inc. -36.97% 31.54% 22.68% 14.01% 31.51%
NVIDIA Corp. 15.66% 37.31% 27.18% 26.07% 32.47%
Qualcomm Inc. 21.74% 35.88% 29.16% 26.58% 31.59%
Texas Instruments Inc. 41.85% 50.63% 48.84% 40.76% 39.79%
Operating Profit Margin, Sector
Semiconductors & Semiconductor Equipment 18.59% 27.10% 28.22% 25.72% 27.91%
Operating Profit Margin, Industry
Information Technology 26.21% 28.31% 28.72% 24.93% 25.33%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

1 2023 Calculation
Operating profit margin = 100 × Income from operations ÷ Net sales
= 100 × 7,654 ÷ 26,517 = 28.86%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Applied Materials Inc. operating profit margin ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Net Profit Margin

Applied Materials Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Oct 25, 2020 Oct 27, 2019 Oct 28, 2018
Selected Financial Data (US$ in millions)
Net income 6,856 6,525 5,888 3,619 2,706 3,313
Net sales 26,517 25,785 23,063 17,202 14,608 17,253
Profitability Ratio
Net profit margin1 25.86% 25.31% 25.53% 21.04% 18.52% 19.20%
Benchmarks
Net Profit Margin, Competitors2
Advanced Micro Devices Inc. 3.77% 5.59% 19.24% 25.50% 5.07%
Analog Devices Inc. 26.94% 22.88% 19.00% 21.79% 22.75% 24.12%
Broadcom Inc. 39.31% 34.62% 24.54% 12.39% 12.05% 58.80%
First Solar Inc. 25.03% -1.69% 16.03% 14.69% -3.75%
Intel Corp. 3.11% 12.71% 25.14% 26.84% 29.25%
KLA Corp. 32.27% 36.06% 30.04% 20.96% 25.73%
Lam Research Corp. 25.88% 26.73% 26.72% 22.42% 22.70%
Micron Technology Inc. -37.54% 28.24% 21.16% 12.54% 26.97%
NVIDIA Corp. 16.19% 36.23% 25.98% 25.61% 35.34%
Qualcomm Inc. 20.19% 29.27% 26.94% 22.09% 18.07%
Texas Instruments Inc. 37.16% 43.68% 42.35% 38.69% 34.88%
Net Profit Margin, Sector
Semiconductors & Semiconductor Equipment 17.15% 25.31% 25.73% 22.99% 24.09%
Net Profit Margin, Industry
Information Technology 22.04% 23.93% 25.58% 21.38% 22.17%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

1 2023 Calculation
Net profit margin = 100 × Net income ÷ Net sales
= 100 × 6,856 ÷ 26,517 = 25.86%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Applied Materials Inc. net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Return on Equity (ROE)

Applied Materials Inc., ROE calculation, comparison to benchmarks

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Oct 25, 2020 Oct 27, 2019 Oct 28, 2018
Selected Financial Data (US$ in millions)
Net income 6,856 6,525 5,888 3,619 2,706 3,313
Stockholders’ equity 16,349 12,194 12,247 10,578 8,214 6,839
Profitability Ratio
ROE1 41.94% 53.51% 48.08% 34.21% 32.94% 48.44%
Benchmarks
ROE, Competitors2
Advanced Micro Devices Inc. 1.53% 2.41% 42.18% 42.66% 12.06%
Analog Devices Inc. 9.32% 7.54% 3.66% 10.17% 11.64% 13.61%
Broadcom Inc. 58.70% 50.62% 26.99% 12.40% 10.92% 45.99%
First Solar Inc. 12.42% -0.76% 7.86% 7.22% -2.26%
Intel Corp. 1.60% 7.90% 20.83% 25.79% 27.16%
KLA Corp. 116.01% 237.04% 61.53% 45.65% 44.21%
Lam Research Corp. 54.94% 73.35% 64.85% 43.53% 46.89%
Micron Technology Inc. -13.22% 17.41% 13.34% 6.89% 17.59%
NVIDIA Corp. 19.76% 36.65% 25.64% 22.91% 44.33%
Qualcomm Inc. 33.51% 71.81% 90.88% 85.54% 89.35%
Texas Instruments Inc. 38.53% 60.02% 58.27% 60.90% 56.33%
ROE, Sector
Semiconductors & Semiconductor Equipment 13.28% 22.31% 25.40% 24.08% 26.08%
ROE, Industry
Information Technology 31.78% 38.36% 42.36% 35.12% 36.53%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

1 2023 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 6,856 ÷ 16,349 = 41.94%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Applied Materials Inc. ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Return on Assets (ROA)

Applied Materials Inc., ROA calculation, comparison to benchmarks

Microsoft Excel
Oct 29, 2023 Oct 30, 2022 Oct 31, 2021 Oct 25, 2020 Oct 27, 2019 Oct 28, 2018
Selected Financial Data (US$ in millions)
Net income 6,856 6,525 5,888 3,619 2,706 3,313
Total assets 30,729 26,726 25,825 22,353 19,024 17,773
Profitability Ratio
ROA1 22.31% 24.41% 22.80% 16.19% 14.22% 18.64%
Benchmarks
ROA, Competitors2
Advanced Micro Devices Inc. 1.26% 1.95% 25.46% 27.78% 5.66%
Analog Devices Inc. 6.79% 5.46% 2.66% 5.69% 6.37% 7.31%
Broadcom Inc. 19.33% 15.69% 8.91% 3.90% 4.04% 24.46%
First Solar Inc. 8.02% -0.54% 6.32% 5.60% -1.53%
Intel Corp. 0.88% 4.40% 11.80% 13.65% 15.42%
KLA Corp. 24.07% 26.37% 20.23% 13.11% 13.05%
Lam Research Corp. 24.02% 26.78% 24.59% 15.47% 18.26%
Micron Technology Inc. -9.08% 13.11% 9.96% 5.01% 12.91%
NVIDIA Corp. 10.61% 22.07% 15.05% 16.15% 31.15%
Qualcomm Inc. 14.17% 26.39% 21.93% 14.60% 13.31%
Texas Instruments Inc. 20.12% 32.16% 31.48% 28.91% 27.84%
ROA, Sector
Semiconductors & Semiconductor Equipment 7.42% 12.50% 13.52% 11.70% 13.08%
ROA, Industry
Information Technology 13.01% 14.99% 15.62% 12.12% 12.78%

Based on: 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27), 10-K (reporting date: 2018-10-28).

1 2023 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 6,856 ÷ 30,729 = 22.31%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Applied Materials Inc. ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.