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Applied Materials Inc. – Semiconductor and Related Device Manufacturing
Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets.
Analysis Results
Intrinsic Value $226.90
Latest Price $136.17
Relative Value 40% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 25.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 11.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 25.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 10.1 9.03
2024 12.7 10.1
2025 15.9 11.4
2026 19.9 12.7
2027 24.9 14.3
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 260 billion. This corresponds to a present value of 133 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 57.5 billion. Adding in the terminal value gives a total present value of 190 billion.

There are presently 840.0 million outstanding shares, so the intrinsic value per share is 226.9.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 15,925,000,000
Current Cash 2,581,000,000
Current Liabilities 7,379,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 5,965,000,000
Change in NCWC 1,661,000,000
EBIT 7,784,000,000
Tax Provision 1,074,000,000
Depreciation and Amortization 444,000,000
Capital Expenditure -787,000,000
Unlevered Free Cash Flow 8,001,853,138
Current Assets 16,107,000,000
Current Cash 5,459,000,000
Current Liabilities 6,344,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 4,304,000,000
Change in NCWC 1,132,000,000
EBIT 7,200,000,000
Tax Provision 883,000,000
Depreciation and Amortization 394,000,000
Capital Expenditure -668,000,000
Unlevered Free Cash Flow 7,119,054,497
Current Assets 13,369,000,000
Current Cash 5,738,000,000
Current Liabilities 4,459,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 3,172,000,000
Change in NCWC 431,000,000
EBIT 4,365,000,000
Tax Provision 547,000,000
Depreciation and Amortization 376,000,000
Capital Expenditure -422,000,000
Unlevered Free Cash Flow 4,176,871,099
Current Assets 10,206,000,000
Current Cash 3,618,000,000
Current Liabilities 4,447,000,000
Current Debt 600,000,000
Non-Cash Working Capital (NCWC) 2,741,000,000
Change in NCWC 92,000,000
EBIT 3,350,000,000
Tax Provision 563,000,000
Depreciation and Amortization 363,000,000
Capital Expenditure -441,000,000
Unlevered Free Cash Flow 2,787,049,862
Current Assets 10,747,000,000
Current Cash 4,030,000,000
Current Liabilities 4,068,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 2,649,000,000
Change in NCWC 1,122,000,000
EBIT 4,796,000,000
Tax Provision 1,381,000,000
Depreciation and Amortization 457,000,000
Capital Expenditure -622,000,000
Unlevered Free Cash Flow 4,341,991,052
Current Assets 12,918,000,000
Current Cash 7,276,000,000
Current Liabilities 4,115,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,527,000,000
Change in NCWC 355,000,000
EBIT 3,868,000,000
Tax Provision 297,000,000
Depreciation and Amortization 407,000,000
Capital Expenditure -345,000,000
Unlevered Free Cash Flow 3,977,094,344
Current Assets 8,353,000,000
Current Cash 3,749,000,000
Current Liabilities 3,632,000,000
Current Debt 200,000,000
Non-Cash Working Capital (NCWC) 1,172,000,000
Change in NCWC -526,000,000
EBIT 2,152,000,000
Tax Provision 292,000,000
Depreciation and Amortization 389,000,000
Capital Expenditure -253,000,000
Unlevered Free Cash Flow 1,449,837,059
Current Assets 9,261,000,000
Current Cash 4,965,000,000
Current Liabilities 3,798,000,000
Current Debt 1,200,000,000
Non-Cash Working Capital (NCWC) 1,698,000,000
Change in NCWC 716,000,000
EBIT 1,618,000,000
Tax Provision 221,000,000
Depreciation and Amortization 371,000,000
Capital Expenditure -215,000,000
Unlevered Free Cash Flow 2,266,234,042
Current Assets 6,967,000,000
Current Cash 3,162,000,000
Current Liabilities 2,823,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 982,000,000
Change in NCWC -326,000,000
EBIT 1,525,000,000
Tax Provision 376,000,000
Depreciation and Amortization 375,000,000
Capital Expenditure -241,000,000
Unlevered Free Cash Flow 937,005,524
Current Assets 5,642,000,000
Current Cash 1,891,000,000
Current Liabilities 2,443,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 1,308,000,000
Change in NCWC 408,000,000
EBIT 769,000,000
Tax Provision 94,000,000
Depreciation and Amortization 410,000,000
Capital Expenditure -197,000,000
Unlevered Free Cash Flow 1,183,468,571
Current Assets 5,102,000,000
Current Cash 1,937,000,000
Current Liabilities 2,265,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 900,000,000
Change in NCWC -418,000,000
EBIT 1,000,000,000
Tax Provision 207,000,000
Depreciation and Amortization 422,000,000
Capital Expenditure -162,000,000
Unlevered Free Cash Flow 186,936,708

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