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AXT
(NASDAQ:AXTI)
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Rating:54Neutral
Price Target:
$58.00
▼(-14.01% Downside)
Action:Reiterated
Date:10/17/26
AXTI scores in the mid-range driven by an improving profitability trajectory and a low-leverage balance sheet, reinforced by a very positive earnings call and confident near-term guidance. The score is held back most by currently negative cash flow, weak/bearish technicals (price well below key moving averages with negative MACD), and very poor valuation support given the extremely high P/E and no dividend yield.
Positive Factors
Profitability and Margin Recovery
The sharp gross-margin expansion and return to profitability indicate meaningful operating leverage from higher volume, favorable mix, and efficiency. If sustained, these improvements can strengthen earnings power and support reinvestment in capacity over the next several quarters.
Negative Factors
Negative Cash Generation
Current cash consumption weakens the quality and self-funding capacity of the earnings recovery. Persistent negative operating and free cash flow could require external financing or constrain investment, while mismatches between profit and cash increase working-capital and execution risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability and Margin Recovery
The sharp gross-margin expansion and return to profitability indicate meaningful operating leverage from higher volume, favorable mix, and efficiency. If sustained, these improvements can strengthen earnings power and support reinvestment in capacity over the next several quarters.
Read all positive factors
AXT Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks revenue into the company’s product lines or business units, highlighting which offerings drive growth and profits and which are more cyclical or margin-sensitive. Understanding segment mix helps investors see where management is investing, identify dependency on a single product or customer group, and gauge the resilience of future revenues.
Breaks revenue into the company’s product lines or business units, highlighting which offerings drive growth and profits and which are more cyclical or margin-sensitive. Understanding segment mix helps investors see where management is investing, identify dependency on a single product or customer group, and gauge the resilience of future revenues.
Data provided by:
The Fly
The FlyAXT (AXTI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.42B
Dividend YieldN/A
Average Volume (3M)8.96M
Price to Earnings (P/E)2179.1
Beta (1Y)2.77
Revenue Growth45.81%
EPS GrowthN/A
CountryUS
Employees1,541
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.02
Shares Outstanding65,573,210
10 Day Avg. Volume10,312,312
30 Day Avg. Volume8,959,008
Financial Highlights & Ratios
PEG Ratio-0.41
Price to Book (P/B)2.63
Price to Sales (P/S)8.13
P/FCF Ratio-38.25
Enterprise Value/Market Cap1.26
Enterprise Value/Revenue34.22
Enterprise Value/Gross Profit106.32
Enterprise Value/Ebitda292.49
Forecast
1Y Price Target
$90.75Price Target Upside34.54% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)0.86
Revenue Forecast (FY)$221.20M
AXT Business Overview & Revenue Model
Company Description
AXT, Inc. is a company dedicated to the design, development, production, and worldwide distribution of both compound and single-element semiconductor substrates. Leveraging its proprietary vertical gradient freeze technology, the firm manufactures...
How the Company Makes Money
AXT primarily makes money by selling semiconductor substrate wafers to customers that fabricate devices on top of these substrates (e.g., epitaxy houses and device manufacturers). Revenue is generated from product sales, typically priced based on ...
AXT Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presents a markedly positive operational and financial inflection: record revenue, historic indium phosphide sales, large gross margin expansion, return to profitability, strong cash from a secondary offering, and accelerating capacity and customer agreements. Principal risks highlighted are dependence on export permits, increased exposure to China, some opacity around backlog booking, and the need to manage operating/CapEx as capacity scales. On balance, the strength of revenue, margins, cash and customer commitments significantly outweighs the challenges.Positive Updates
Record Quarterly Revenue
Revenue of $47.6M in Q2 2026 — the highest quarterly revenue in company history — up ~77% sequentially from $26.9M in Q1 2026 and up 164% year-over-year from $18.0M in Q2 2025.
Negative Updates
Export Permit Uncertainty
Recognition of some revenue, especially for shipments outside China, depends on obtaining export permits from Chinese authorities; management states timing and certainty of permits remain unpredictable and could limit near-term revenue recognition despite inventory.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Revenue of $47.6M in Q2 2026 — the highest quarterly revenue in company history — up ~77% sequentially from $26.9M in Q1 2026 and up 164% year-over-year from $18.0M in Q2 2025.
Read all positive updates
Company Guidance
AXT guided Q3 revenue of approximately $66.0 million that management has a high degree of confidence in recognizing (with potential upside if additional export permits are obtained); non‑GAAP operating expense is expected to be about $10.5 million (GAAP ≈ $11.0 million), non‑GAAP net income $0.30–$0.32 per diluted share (GAAP $0.29–$0.31) on an estimated ~66.5 million diluted shares. Management highlighted Q2 non‑GAAP gross margin of 45.0% (GAAP 44.9%) and expects to remain above 40% with further upside from mix, volume and efficiency gains; backlog is >$100 million, indium phosphide revenue is on track to more than triple by end‑2026, quarterly indium phosphide capacity is targeted at roughly $60 million by year‑end and about $130 million exiting 2027. The company also noted cash, cash equivalents and investments of $749 million as of June 30 (up ≈ $626 million during Q2), prepayments of $22.3M and $25.4M under long‑term supply agreements, net inventory ≈ $96.3M, depreciation ≈ $2.5M and total stock comp ≈ $0.8M, and said its CapEx plans remain consistent with prior guidance (no material increase beyond the previously communicated levels).AXT Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
78
Positive
Cash Flow
33
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 125.51M | 88.33M | 99.36M | 75.80M | 141.12M | 137.39M |
| Gross Profit | 40.39M | 11.24M | 23.84M | 13.32M | 52.12M | 47.41M |
| EBITDA | 14.68M | -11.18M | -338.00K | -8.78M | 30.12M | 25.10M |
| Net Income | 4.05M | -21.26M | -11.62M | -17.88M | 15.81M | 14.57M |
Balance Sheet | ||||||
| Total Assets | 1.10B | 433.75M | 339.31M | 358.70M | 370.07M | 332.44M |
| Cash, Cash Equivalents and Short-Term Investments | 417.20M | 120.27M | 22.83M | 39.89M | 44.29M | 42.18M |
| Total Debt | 85.40M | 64.82M | 49.78M | 55.73M | 48.88M | 16.54M |
| Total Liabilities | 145.34M | 99.12M | 84.41M | 89.56M | 80.33M | 52.21M |
| Stockholders Equity | 887.27M | 273.29M | 192.77M | 203.99M | 221.61M | 211.53M |
Cash Flow | ||||||
| Free Cash Flow | -19.57M | -18.78M | -17.88M | -7.07M | -37.23M | -32.95M |
| Operating Cash Flow | -5.76M | -12.78M | -12.11M | 3.40M | -8.77M | -3.31M |
| Investing Cash Flow | -319.37M | -6.83M | -4.45M | -2.60M | -25.22M | -38.81M |
| Financing Cash Flow | 729.88M | 107.09M | -536.00K | 8.61M | 38.03M | 5.72M |
AXT Technical Analysis
Negative
67.45
Price Trends
68.49
Negative
69.09
Negative
63.96
Negative
Market Momentum
-4.91
Positive
37.25
Neutral
17.14
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXTI, the sentiment is Negative. The current price of 67.45 is below the 20-day moving average (MA) of 68.10, below the 50-day MA of 68.49, and above the 200-day MA of 63.96, indicating a bearish trend. The MACD of -4.91 indicates Positive momentum. The RSI at 37.25 is Neutral, neither overbought nor oversold. The STOCH value of 17.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AXTI.
AXT Risk Analysis
AXT disclosed 64 risk factors in its most recent earnings report. AXT reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AXT Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $351.87M | 19.63 | 30.52% | 5.51% | 24.06% | 29.27% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $252.64M | -7.39 | -7.84% | 1.27% | -3.87% | -946.99% | |
57 Neutral | $306.57M | -116.36 | -3.79% | ― | 20.89% | -240.91% | |
54 Neutral | $3.42B | 2,179.08 | 1.00% | ― | 45.81% | ― | |
53 Neutral | $168.92M | -5.00 | -31.56% | ― | 7.68% | 0.83% | |
47 Neutral | $114.73M | -4.45 | -77.91% | ― | 369.39% | 1.34% |
* Technology Sector Average
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AXT Corporate Events
Business Operations and StrategyShareholder Meetings
AXT Updates Bylaws, Lowers Shareholder Meeting Quorum
Positive
Jul 29, 2026
On July 26, 2026, AXT, Inc.’s Board of Directors approved an immediate amendment to the company’s Second Amended and Restated Bylaws, changing the shareholder meeting quorum requirement. The threshold was reduced from a majority of sha...
Business Operations and Strategy
AXT Secures Long-Term Indium Phosphide Supply Agreement
Positive
Jul 29, 2026
On July 26, 2026, AXT Inc. entered into a long-term capacity reservation agreement with Lumentum Operations LLC for the supply of indium phosphide wafer substrates, running through December 31, 2031. AXT will reserve minimum annual product capacit...
Business Operations and StrategyExecutive/Board Changes
AXT Expands Board, Adds Independent Director for Growth
Positive
Jul 22, 2026
On July 16, 2026, AXT’s board of directors expanded from five to six members and elected Jia-Bin Duh as an independent Class III director, a move formally announced in a July 22, 2026 press release. Duh will serve on the audit, compensation,...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.