Craig-Hallum has started coverage on Photronics (PLAB, Financial), assigning the company a Buy rating. The firm has set a price target of $32, reflecting positive expectations for the stock's future performance. This initiation suggests confidence in Photronics' potential for growth and resilience in the market. Investors may find this coverage noteworthy as it highlights potential opportunities in Photronics' stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for Photronics Inc (PLAB, Financial) is $30.83 with a high estimate of $31.65 and a low estimate of $30.00. The average target implies an upside of 65.64% from the current price of $18.61. More detailed estimate data can be found on the Photronics Inc (PLAB) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, Photronics Inc's (PLAB, Financial) average brokerage recommendation is currently 1.5, indicating "Buy" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Photronics Inc (PLAB, Financial) in one year is $23.14, suggesting a upside of 24.34% from the current price of $18.61. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Photronics Inc (PLAB) Summary page.
PLAB Key Business Developments
Release Date: May 28, 2025
- Revenue: $211 million, flat sequentially, down 3% year over year.
- IC Revenue: $156 million, declined 3% year over year.
- High-End Revenue: Increased 2% year over year, representing 30% of IC revenue.
- Mainstream IC Revenue: Declined 6% year over year.
- FPD Revenue: $55 million, declined 2% year over year.
- Gross Margin: 37%, in line with quarterly average over the past three years.
- Operating Margin: 26%, improved 180 basis points sequentially.
- Non-GAAP Diluted EPS: $0.40.
- GAAP Diluted EPS: $0.15 per share.
- Operating Cash Flow: $31 million, representing 15% of total revenue.
- CapEx: $61 million in the quarter, with a plan to spend $200 million in fiscal 2025.
- Total Cash and Short-Term Investments: $558 million at the end of the quarter.
- Share Repurchase: $72 million spent to repurchase 3.6 million shares.
- Q3 Revenue Guidance: $200 million to $208 million.
- Q3 Non-GAAP EPS Guidance: $0.35 to $0.41 per diluted share.
- Q3 Operating Margin Guidance: 20% to 22%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Photronics Inc (PLAB, Financial) achieved second-quarter sales of $211 million, which was in the middle of their guidance range.
- The company repurchased 3.6 million shares for $72 million, which is expected to drive greater earnings leverage in the future.
- Photronics Inc (PLAB) is well-positioned to benefit from the market transition towards higher-end nodes, particularly in Asia.
- The company operates 11 cleanroom production facilities globally, allowing for rapid response and collaboration with customers.
- Photronics Inc (PLAB) reported a gross margin of 37%, which is in line with their quarterly average over the past three years and above historical levels.
Negative Points
- Second-quarter revenue was essentially flat sequentially and down 3% year over year.
- Mainstream IC revenue declined 6% year over year, with significant weakness in photomasks serving older generation design nodes.
- Revenue from memory applications declined sequentially due to the timing of projects.
- US revenue declined sequentially due to lower-end design node weakness and the timing of customer advanced node projects.
- The company remains cautious about the near-term demand environment due to market conditions and tariff uncertainty.
