The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Photronics (NASDAQ: PLAB) and the rest of the semiconductor manufacturing stocks fared in Q2.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 9.9% on average since the latest earnings results.
Photronics (NASDAQ: PLAB)
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Photronics reported revenues of $210.4 million, flat year on year. This print exceeded analysts’ expectations by 3%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
Commenting on the third-quarter performance, Chairman and CEO George Macricostas said, "Photronics delivered very good results in our fiscal third quarter with revenue, profitability and EPS ahead of expectations. Looking ahead, we remain focused on operational efficiency to maintain our excellent standard of maximizing customer cycle times. We will further accelerate internal investment efforts to enhance geographic revenue diversification and position the company for sustained revenue and earnings growth.”
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $22.48.
Is now the time to buy Photronics? Access our full analysis of the earnings results here, it’s free.
Best Q2: IPG Photonics (NASDAQ: IPGP)
Both a designer and manufacturer of its products, IPG Photonics (NASDAQ: IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.
IPG Photonics reported revenues of $250.7 million, down 2.7% year on year, outperforming analysts’ expectations by 9.4%. The business had an exceptional quarter with a beat of analysts’ EPS and adjusted operating income estimates.
The market seems happy with the results as the stock is up 5.6% since reporting. It currently trades at $81.93.
Is now the time to buy IPG Photonics? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: FormFactor (NASDAQ: FORM)
With customers across the foundry and fabless markets, FormFactor (NASDAQ: FORM) is a US-based provider of test and measurement technologies for semiconductors.
FormFactor reported revenues of $195.8 million, flat year on year, exceeding analysts’ expectations by 3.4%. Still, it was a slower quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 15% since the results and currently trades at $29.25.
Read our full analysis of FormFactor’s results here.
Amtech (NASDAQ: ASYS)
Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ: ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.
Amtech reported revenues of $19.56 million, down 23.1% year on year. This print beat analysts’ expectations by 15%. Zooming out, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
Amtech achieved the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 80.4% since reporting and currently trades at $8.08.
Read our full, actionable report on Amtech here, it’s free.
Entegris (NASDAQ: ENTG)
With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Entegris reported revenues of $792.4 million, down 2.5% year on year. This result topped analysts’ expectations by 3.8%. Aside from that, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but revenue guidance for next quarter meeting analysts’ expectations.
The stock is down 12.6% since reporting and currently trades at $81.31.
Read our full, actionable report on Entegris here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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