Opinions
Jeff Parent B. Eng. FCSI CIM
Axcellis Technologies, Inc.
ACLS-Q
DON'T BUY
Nov 22, 2024
Stock price when the opinion was issued
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ACLS makes equipment in the fabrication of semiconductor chips in the US. Revenues are up 25% on the year, continuing a strong trend over the past three years. EPS grew by 41%. Its equipment is particularly in demand by EV manufacturers, where their methods are more durable. Their order backlog is $1.2 billion. It trades at 18x earnings -- almost 40% discount to Nasdaq-100 average -- and it supports a ROE 32%. We recommend a stop-loss at $102, looking to achieve $175 -- upside potential of 32%. Yield 0%
(Analysts’ price target is $174.80)ACLS designs and manufactures processing equipment used in the fabrication of chips and is now trading at 14.2x times' Forward P/E. In Q1-2024, ACLS’s revenue was largely flat compared to last year's $252M, beating estimates of $242.6M and EPS was $1.57, beating estimates of $1.24. The operating results were solid, above the company’s guidance. The balance sheet is strong, with a net cash of $485M. The company generates healthy cash flow and returns some as buybacks. Based on consensus estimates, sales are expected to be flat this year and start to grow by 10% next year. We think there is some cyclicality in ACLS’s business but nowhere close to a secular decline. We think it looks decent today.
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Looks like a rollercoaster at the end of the ride. Don't touch this right now. Looks to be making a recovery today, and there might be a quick pop to $82. The drop from June is significant. Usually if you see a bottom and big volumes, there's a big turnover and lots are interested in buying it. But he doesn't see those big volumes.
In a downtrend. Prices reflect value, despite what you might read.