AMAT Value Scorecard - Applied Materials

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

42/60

moderate value score

Earnings & returns

EPS Trend

5/5

Diluted EPS: $7.44 (2022), $8.11 (2023), $8.61 (2024), $8.66 (2025). It rose every year; the framework scores that as 5.

ROE Trend

5/5

ROE (net income / common equity): 53.5% (2022), 41.9% (2023), 37.8% (2024), 34.3% (2025). Median 39.9%, lowest 34.3%; the framework scores a median above 20% as 5.

ROIC

5/5

ROIC of 29.3%: operating income of $8.29B divided by $28.30B of capital (total assets $36.30B minus current liabilities $8.00B), fiscal year to Oct 26, 2025, as filed in the 10-K (SEC EDGAR). The framework scores above 20% as 5.

Profit Margins

5/5

Net margin of 30.1%; the framework scores above 20% as 5; gross margin 49.4%, operating margin 33.7%.

Balance sheet & cash

Debt-to-Equity

5/5

Net cash: total debt $7.35B, total cash $9.23B. The framework scores a net cash position as 5.

Free Cash Flow

3/5

Free cash flow (operating cash flow minus capital expenditure): $4.61B (2022), $7.59B (2023), $7.49B (2024), $5.70B (2025). It ended above 2022 but did not rise in 2 of 3 years; the framework scores that as 3.

Retained Earnings

5/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $37.89B (2022), $43.73B (2023), $49.65B (2024), $55.23B (2025). It rose every year; the framework scores that as 5.

Valuation models

Graham IV

1/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $11.59 x (8.5 + 2 x 3.3) x (4.4 / 4.5) = $171.12. Current price $409.29; price is 139.2% above the model value.

DCF Value

1/5

FCF/share = $3.875, stage 1 growth = 3.4% for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $16.16, PV of terminal value = $41.85, DCF value = $58.00. Current price $409.29; price is 605.6% above the model value.

Margin of Safety

1/5

Graham value $171.12 (price is 139.2% above the model value); DCF value $58.00 (price is 605.6% above the model value).

Price-to-Book

1/5

P/B of 12.68; the framework scores above 5.0 as 1.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 10 of 10 years (2016-2025); lowest 19.7%, highest 40.3%.

Gross margin, each year

Between 41.7% and 48.7% over 10 years (a range of 7.0 points).

Competition, in the company’s own words · 10-K filed Dec 12, 2025

The industries in which we operate are highly competitive and characterized by rapid technological change. Our ability to compete generally depends on our ability to commercialize our technology in a timely manner, continually improve our products, and develop new products that meet constantly evolving customer requirements. Significant competitive factors include technical capability and differentiation,

The opening of the company’s “Competition” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

5/5

Capital allocation, 2022-2025: dividends or buybacks paid in every year (pass); $21.43B paid out against $25.39B of free cash flow (pass); total debt $5.83B to $7.05B, up 20.9%, 0.7x EBITDA (pass: at most 2x EBITDA); shares outstanding 0.84B to 0.79B, down 6.0% (pass). 4 of 4 tests passed; the framework scores that as 5.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $11.59, g = 3.3%, Y = 4.5
    IV = $171.12
    Current price $409.29 vs Graham value $171.12 — price is 139.2% above the model value.

  DCF:
    FCF/share = $3.875
    Stage 1 growth = 3.4% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
      Y1: $4.007 → PV $3.643
      Y2: $4.143 → PV $3.424
      Y3: $4.284 → PV $3.219
      Y4: $4.430 → PV $3.026
      Y5: $4.580 → PV $2.844
    Stage 1 PV sum = $16.16
    Terminal value at end of Y5 = $67.40
    PV of terminal value = $41.85
    DCF value = $58.00
    Current price $409.29 vs DCF value $58.00 — price is 605.6% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $409.29. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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