Is AMAT a high-quality business?

AlphaMadera's AlphaQuality grade scores Applied Materials, Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how AMAT compares to a Buffett-style quality bar.

What is Applied Materials, Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to AMAT based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes AMAT a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

AMAT - Applied Materials, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $513.76 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

A- 83.6 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

B+ 79.0

5yr Avg ROIC 22.4% 96/100
Operating Margin Trend -0.26 pp/yr 40/100

Capital Efficiency

Weight: 15%

A+ 98.4

5yr Avg ROE 32.8% 100/100
5yr Share-Count CAGR -3.2% 95/100

Growth Quality

Weight: 25%

B 71.9

5yr Revenue CAGR 5.3% 62/100
5yr EPS CAGR 7.9% 69/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 20%

A 91.5

5yr FCF Margin 23.0% 93/100
5yr FCF/NI Conversion 0.90x 90/100

Balance Sheet

Weight: 10%

A+ 98.1

Net Debt / EBITDA -0.16x 96/100
Interest Coverage (EBIT/Int) 35.46x 100/100
Altman Z-Score 16.48 100/100

Stability

Weight: 5%

C+ 58.8

EPS Volatility (σ/μ) 0.58 23/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 0/5 100/100

5 of 5 gurus held; 4 added; 1 trimmed; 2 full exits.

Holders: 5
Avg Δ position: +46.4%
New buys: 0
Full exits: 2

Soros sold -100%
Laffont sold -100%
Cooperman increased +179%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.