MeritValue

APPLIED MATERIALS INC /DE

AMATdata completeness 100%19 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'gainsOnRealEstateSales'

The thesis, from the filings

APPLIED MATERIALS INC /DE earns about 42% on invested capital, far above its ~9% cost of capital, and has bought back 12% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $87.12 and $453.17 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$23.1B1$25.8B2$26.5B3$27.2B3$28.4B3
Net income$5.89B4$6.53B5$6.86B6$7.18B6$7B6
Operating cash flow$5.44B7$5.4B8$8.7B9$8.68B9$7.96B9
Capital expenditure$668M10$787M11$1.11B12$1.19B12$2.26B12
Free cash flow (derived)$4.77B7$4.61B8$7.59B9$7.49B9$5.7B9
Total debt$5.45B13$5.46B14$5.56B15$6.96B16$6.56B16
Cash & equivalents$5B17$2B18$6.13B19$8.02B19$7.24B19
Diluted shares919.0M877.0M845.0M834.0M808.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$252.66
your share of equity
Profit it earned you last year
$86.61
Free cash flow it threw off
$70.52
Debt you’d be carrying
$81.13

10 shares is a claim on $252.66 of net worth that earned you $86.61 and generated $70.52 of cash last year, against $81.13 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
42% avg · 5y
FY21 48%FY22 43%FY23 45%FY24 40%FY25 35%

It earned about 42% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−12% shares · 5y

Share count is down 12% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has risen 20% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0

The 3 estimate methods that apply put fair value between $87.12 and $453.17 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$453.17
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth17.5%
  • fcfBase$7.49B
DCF · Growth Exit 5Y
$271.39
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth17.5%
  • fcfBase$7.49B
Earnings Power Value
$87.12
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$6.86B
  • growthAssumed0.0%
Graham Number
$70.83
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years17.5%
Discount rate (WACC)9.02%
Terminal growth2.5%
At your growth, a share is worth $271.39
The three cases
Bear0.0%$131.49
Base17.5%$271.39
Bull20.0%$298.65

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 17.5%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-10-31 · accession 0000006951-23-000041 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-10-30 · accession 0000006951-24-000044 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-10-29 · accession 0001628280-25-056742 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-10-31 · accession 0000006951-23-000041 (NetIncomeLoss)
  5. 10-K · period ending 2022-10-30 · accession 0000006951-24-000044 (NetIncomeLoss)
  6. 10-K · period ending 2023-10-29 · accession 0001628280-25-056742 (NetIncomeLoss)
  7. 10-K · period ending 2021-10-31 · accession 0000006951-23-000041 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-10-30 · accession 0000006951-24-000044 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-10-29 · accession 0001628280-25-056742 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-10-31 · accession 0000006951-23-000041 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-10-30 · accession 0000006951-24-000044 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-10-29 · accession 0001628280-25-056742 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-10-31 · accession 0000006951-22-000043 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-10-30 · accession 0000006951-23-000041 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-10-29 · accession 0000006951-24-000044 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-10-27 · accession 0001628280-25-056742 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-10-31 · accession 0000006951-23-000041 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-10-30 · accession 0000006951-24-000044 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-10-29 · accession 0001628280-25-056742 (CashAndCashEquivalentsAtCarryingValue)