Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 14 May, 25 | PLAB | Buy | USD 20.93 | USD 22.0 | USD 23.5 | 14 days | 12.3% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Photronics, Inc., together with its subsidiaries, engages in the manufacture and sale of photomask products and services in the United States, Taiwan, China, Korea, Europe, and internationally. It offers photomasks that are used in the manufacture of integrated circuits and flat panel displays (FPDs); and to transfer circuit patterns onto semiconductor wafers, and FDP substrates. The company offers electrical and optical components. It sells its products to semiconductor and FPD manufacturers, designers, and foundries, as well as to other high-performance electronics manufacturers through its sales personnel and customer service representatives. The company was formerly known as Photronic Labs, Inc. and changed its name to Photronics, Inc. in 1990. Photronics, Inc. was incorporated in 1969 and is based in Brookfield, Connecticut.
Operating cash flow increased to $78.5 million, providing strong liquidity support
GAAP net income rose by 64% year-over-year, from $26.2 million to $42.9 million
IC segment revenue fell 6% sequentially and 2% year-over-year, reflecting softer demand in mainstream products
Total revenue declined 5% sequentially from the previous quarter
Photronics is exposed to cyclical demand fluctuations in semiconductor and display markets, which can significantly impact both revenue stability and capacity utilization
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 20.93 | 17.5 | 22.0 | 23.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Stable Revenue Reflecting Market Dynamics
Photronics, Inc. reported revenue of $212.1 million for the first quarter of fiscal 2025, representing a 2% decline year-over-year and a 5% sequential decrease. The company attributed this performance to seasonal demand patterns across its key markets. Within the Integrated Circuits (IC) and Flat Panel Display (FPD) segments, demand for high-end photomasks remained strong, particularly in support of advanced node migration and memory applications. However, mainstream photomask categories experienced headwinds due to broader market softness.
Profitability Outpaces Expectations
Despite modest top-line pressure, Photronics delivered robust bottom-line performance. GAAP net income attributable to shareholders rose to $42.9 million, or $0.68 per diluted share—up significantly from $26.2 million ($0.42 per share) in the same quarter last year and $33.9 million ($0.54 per share) in the prior quarter. On a non-GAAP basis, net income totaled $32.4 million or $0.52 per diluted share, improving from $29.9 million ($0.48 per share) in Q1 FY24, though down from $37.1 million ($0.59 per share) in Q4 FY24.
Segment Performance and Strategic Initiatives
IC segment revenue reached $154.0 million, declining 2% year-over-year and 6% sequentially, while FPD revenue totaled $58.1 million, marking a 1% decrease both year-over-year and quarter-over-quarter. Management noted continued strategic leverage of IC technical capabilities in the FPD space, contributing to market share gains. Photronics reaffirmed its focus on optimizing product mix and maintaining margin discipline in light of a cautious outlook for fiscal 2025.
Strong Financial Position and Capital Allocation
Photronics generated $78.5 million in cash from operating activities during the quarter and invested $35.2 million in capital expenditures to support organic growth. Additionally, the company returned $4.6 million to shareholders through share repurchases. The balance sheet remained strong, with $642.2 million in cash and minimal debt of $2.7 million. For the second quarter of fiscal 2025, the company projects revenue between $208 million and $216 million, with non-GAAP EPS expected in the range of $0.44 to $0.50.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Photronics Inc (NASDAQ: PLAB) at the closing market price of USD 20.93, as on May 13, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Semiconductor Equipment & Materials
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| PLAB Photronics Inc |
-0.7792 4.47% | 16.65 | 12.69 | - | 1.95 | 1.71 | 1.39 | 3.43 |
| ASML ASML Holding NV ADR |
-23.245 3.11% | 723.82 | 49.01 | 44.05 | 13.98 | 26.27 | 13.85 | 38.25 |
| ASMLF ASML Holding NV |
-22.36 3.00% | 723.00 | 35.84 | 34.36 | 10.90 | 22.09 | 10.98 | 30.93 |
| AMAT Applied Materials Inc |
-5.86 3.67% | 153.62 | 22.32 | 20.00 | 5.84 | 8.22 | 5.64 | 17.45 |
| KLAC KLA-Tencor Corporation |
-30.19 3.90% | 743.78 | 40.82 | 25.71 | 9.52 | 30.25 | 9.80 | 24.77 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 13,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Copyright © 2023 Krish Capital Pty Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.
