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GT Advanced Technologies: Bet on This Stock for the Long Run

April 18, 2014 | About:
jaggom

jaggom

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GT Advanced Technologies (GTAT) has delivered impressive results in 2014. GT Advanced Technologies, along with other Apple suppliers, had gained popularity when smartphone growth was at its peak, but then gradually faded away as time passed. However, GT Advanced Technologies is a good buy for many reasons.

A Strong Quarterly Performance

Before highlighting its outlook for current fiscal 2014, let’s take a look at GT’s recently reported quarter. The company has performed exceedingly well during the quarter and as a result, its shares have gained. Its bottom line topped analysts’ estimates by $0.10 per share. The company boosted investor confidence by providing strong guidance for the current fiscal year.

GT anticipates its total revenue to be in the range of $600 million to $800 million for the current fiscal year, better than Wall Street’s analysis of $691.8 million. GT also said that its revenue in 2015 will exceed $1 billion. Also, GT Advanced Technologies anticipates that its earnings will be in the range of $0.02 per share to $0.18 per share, which is ahead of consensus estimates at the mid-point. Therefore, the company is quite upbeat about its long-term prospects and could be a strong performer in the long run.

The Way Forward

GT Advanced Technologies looks like an attractive investment due to several reasons such as its anticipated growth trajectory. Because of strong end-market prospects, its HICz and PV technologies are experiencing great momentum, and the potential for its new polysilicon technology business is growing.

GT intends to position itself not only as an exceptional sapphire supplier to Apple, but also as an unparalleled world class supplier of sapphire material and equipment for a variety of other customers. This will help GT enter other segments and enhance its presence in LED, power electronics, advanced solar and the industrial market.

GT has a definite plan for its Hyperion technology, silicon carbide HVPE, PVB, HiCz and new polysilicon products that are in the pipeline. The company intends to aggressively commercialize these solutions. These new product launches are expected to reap results with orders expected in the latter part of 2014.

GT is also targeting HVPE and PVD equipment offerings apart from providing sapphire growth solutions for the LED sector. As ASF customers are running at high utilization rates and expecting increased prices, the demand will shoot-up for traditional LED applications. This can lead to substantial revenue gain for GT in the current fiscal 2014.

Apart from this, the company is also benefiting from its LED sector, where demand is continuously increasing, and as a result, volumes are adversely impacting supply-demand dynamics in the industry in a positive way. Of late, it has been noticed that the Tier 1 solar companies are posting positive margins and there is potential for fresh capital investment. This could lead to a greater opportunity for GT to diversify its market and capture substantial market share.

Also, end market demand has picked up due to a drop in prices. Demand is forecasted to grow to 49GW in 2014 from 36GW in 2013. With these amazing projections and the positive financial performance of some of the key players in the solar industry, the photovoltaic sector is showing signs of improvement, and this is a tailwind for GT going forward.

Conclusion

The company anticipates that the current fiscal 2014 will be a transformational year, where the company will undergo a boom in its sapphire materials business while the prospects of the solar market will also help it grow. So, investors should not ignore this growth stock as it is all set to scale new heights in the future.


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