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MKS Instruments (MKSI)
NASDAQ:MKSI
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MKS Instruments
(NASDAQ:MKSI)
72Outperform
Positive Factors
Earnings
MKS posted stronger-than-expected Q1 results driven by strength in Semi and Electronics & Packaging.
Financial Strategy
Improving free cash flow generation should continue to fund debt paydown, which could help close MKSI’s valuation discount to peers.
Market Performance
A cyclical upturn in the semiconductor market driven by higher DRAM sales and a recovery in NAND capex coupled with improvements in the global economy is seen driving 20% year-over-year bottom line growth in 2026.
Negative Factors
Guidance
The Q2 revenue and EPS guide at the midpoint was below consensus.
Specialty Industrial Segment
There are risks in a sluggish Specialty Industrial recovery, which is down 7% year over year and where core auto and industrial end markets may be adversely impacted by tariffs.
Trade Policy
MKS is unable to fully mitigate the impact of manufacturing in China, which includes tariff-related costs.
MKS Instruments (MKSI) vs. S&P 500 (SPY)
Market Cap
$6.08B
Dividend Yield0.97%
Average Volume (3M)1.86M
Price to Earnings (P/E)27.0
Beta (1Y)2.48
Revenue Growth-1.14%
EPS GrowthN/A
CountryUS
Employees10,200
SectorTechnology
Sector Strength76
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.71
Shares Outstanding67,072,200
10 Day Avg. Volume1,412,428
30 Day Avg. Volume1,859,828
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)2.32
Price to Sales (P/S)0.00
P/FCF Ratio13.23
Enterprise Value/Market Cap1.56
Enterprise Value/Revenue0.66
Enterprise Value/Gross Profit5.54
Enterprise Value/Ebitda-91.01
Forecast
1Y Price Target
$110.38Price Target Upside21.75% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
MKS Instruments Business Overview & Revenue Model
Company DescriptionMKS Instruments, Inc. is a global provider of instruments, subsystems, and process control solutions that measure, control, power, and monitor critical parameters of advanced manufacturing processes. The company serves a wide range of industries, including semiconductor, industrial technologies, life and health sciences, and research and defense. MKS Instruments offers a variety of products such as vacuum and analysis solutions, power solutions, and photonics solutions, which are essential for the development and production of advanced technologies.
How the Company Makes MoneyMKS Instruments generates revenue primarily through the sale of its products and services to a diverse set of industries. The semiconductor market is a significant revenue stream, where MKS provides critical components and systems required for the manufacturing of semiconductor devices. Additionally, the company earns revenue from the industrial technologies sector by supplying solutions for industrial manufacturing, energy generation, and environmental monitoring. The life and health sciences sector also contributes to the company's earnings through the provision of products used in biotech and medical research. MKS Instruments may also have strategic partnerships that enhance its market reach and technology offerings, although specific partnership details are not available.
MKS Instruments Financial Statement Overview
Summary
MKS Instruments exhibits a solid financial foundation with strengths in revenue growth and cash flow generation. Despite a challenging 2023 with operational losses, the company has shown recovery in 2024 through improved profitability metrics and debt reduction. The balance sheet remains strong, with healthy liquidity and a favorable debt profile, positioning the company well for future growth in the Hardware & Equipment industry.Income Statement
MKS Instruments has demonstrated consistent revenue growth from 2019 through 2024, albeit with fluctuations. The gross profit margin improved from 43.7% in 2019 to 47.6% in 2024, indicating enhanced cost management. However, the net profit margin faced significant challenges, particularly in 2023 with a substantial net loss, impacting the overall profitability. EBIT and EBITDA margins were also volatile, reflecting operational challenges.65
Positive
Balance Sheet
The company's balance sheet shows resilience with a significant reduction in total debt from 2023 to 2024, resulting in a favorable debt-to-equity ratio decrease from 2.03 to 0.11. The equity ratio has shown stability, indicating a strong asset base. Return on equity was negative in 2023 due to losses but improved in 2024, highlighting recovery efforts. The company maintains a healthy cash position, supporting its financial stability.72
Positive
Cash Flow
MKS Instruments has maintained a strong cash flow position, with operating cash flow showing a positive trend. The free cash flow growth rate is robust, reflecting effective capital expenditure management. Operating and free cash flow to net income ratios were impacted by 2023 losses but improved in 2024, indicating better cash conversion efficiency.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.59B | 3.62B | 3.55B | 2.95B | 2.33B | Gross Profit |
| 1.71B | 1.64B | 1.55B | 1.38B | 1.05B | EBIT |
| 498.00M | -1.55B | 617.00M | 698.90M | 453.80M | EBITDA |
| 873.00M | -1.18B | 888.00M | 795.00M | 551.30M | Net Income Common Stockholders |
| 190.00M | -1.84B | 333.00M | 551.00M | 350.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 714.00M | 875.00M | 910.00M | 1.04B | 836.00M | Total Assets |
| 8.59B | 9.12B | 11.49B | 4.54B | 3.90B | Total Debt |
| 4.78B | 5.02B | 5.17B | 1.03B | 1.03B | Net Debt |
| 4.07B | 4.15B | 4.26B | 61.20M | 419.10M | Total Liabilities |
| 6.27B | 6.65B | 7.01B | 1.65B | 1.54B | Stockholders Equity |
| 2.32B | 2.47B | 4.48B | 2.89B | 2.36B |
| Cash Flow | Free Cash Flow | |||
| 410.00M | 232.00M | 365.00M | 552.80M | 428.30M | Operating Cash Flow |
| 528.00M | 319.00M | 529.00M | 639.50M | 513.20M | Investing Cash Flow |
| -117.00M | -84.00M | -4.55B | -204.60M | -202.40M | Financing Cash Flow |
| -549.00M | -259.00M | 3.97B | -65.00M | -121.50M |
MKS Instruments Technical Analysis
Neutral
90.66
Price Trends
77.38
Positive
92.02
Negative
100.76
Negative
Market Momentum
4.51
Negative
64.73
Neutral
88.72
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKSI, the sentiment is Neutral. The current price of 90.66 is above the 20-day moving average (MA) of 77.05, above the 50-day MA of 77.38, and below the 200-day MA of 100.76, indicating a neutral trend. The MACD of 4.51 indicates Negative momentum. The RSI at 64.73 is Neutral, neither overbought nor oversold. The STOCH value of 88.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MKSI.
MKS Instruments Risk Analysis
MKS Instruments disclosed 31 risk factors in its most recent earnings report. MKS Instruments 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
MKS Instruments Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $5.48B | 15.10 | 35.88% | 0.27% | -3.59% | -11.30% | |
74 Outperform | $4.72B | 67.10 | 9.73% | ― | 6.52% | 1.60% | |
74 Outperform | $5.23B | 20.94 | 17.73% | ― | 7.10% | 58.52% | |
72 Outperform | $6.08B | 27.02 | 9.50% | 0.97% | -1.14% | ― | |
64 Neutral | $5.30B | 46.18 | 8.02% | 0.98% | 8.56% | 18.99% | |
60 Neutral | $11.59B | 10.39 | -7.23% | 2.94% | 7.46% | -10.76% | |
60 Neutral | $5.41B | 50.73 | 4.39% | 1.26% | -3.43% | -50.48% |
* Technology Sector Average
Performance Comparison
MKSI
MKS Instruments
90.66
-40.95
-31.11%
CGNX
Cognex
31.58
-16.50
-34.32%
NOVT
Novanta
131.17
-34.35
-20.75%
ITRI
Itron
114.82
5.18
4.72%
LFUS
Littelfuse
218.72
-41.67
-16.00%
VNT
Vontier
37.07
-3.05
-7.60%
MKS Instruments Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 22.02%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented strong financial results and growth in key markets, particularly in semiconductors and electronics packaging. However, there are significant concerns about the impact of tariffs on margins and softness in certain industrial markets. The company is proactive in debt reduction, but geopolitical uncertainties pose challenges.Q1-2025 Updates
Positive Updates
Strong Financial Performance
First quarter revenue was $936 million, up 8% year-over-year, exceeding the high end of guidance. Gross margins were 47.4% and net earnings per share were $1.71, both at the high end of guidance.
Semiconductor Market Growth
Semiconductor revenue was $413 million, up 3% sequentially and 18% year-over-year. Excluding FX, revenue was up 20% year-over-year.
Electronics and Packaging Success
Revenue from electronics and packaging was $253 million, up 22% year-over-year. Excluding FX and palladium pass-through, sales were up 26%.
Strong Free Cash Flow
First quarter free cash flow was $123 million, over 100% of net earnings and 13% of revenue.
Focus on Debt Reduction
Maintained strong liquidity with $1.3 billion and made a voluntary principal prepayment of $100 million.
Negative Updates
Impact of Tariffs on Margins
Tariffs are expected to impact gross margins by up to 100 basis points, creating uncertainty in the market.
Softness in Specialty Industrial Markets
Revenue in specialty industrial markets was down 13% year-over-year, with continued softness in general industrial and automotive markets.
Pull Forward of Flexible PCB Drilling Equipment Sales
Some sales were pulled forward into Q1, which may result in lower sales in following quarters.
Geopolitical Uncertainty
New and changing trade policies are injecting uncertainty into the industry, impacting customer and supply chain dynamics.
Company Guidance
In the first quarter of fiscal year 2025, MKS Instruments reported strong financial performance, with revenue reaching $936 million and gross margins at 47.4%, both at the high end of the company's guidance. Net earnings per diluted share were $1.71, surpassing the guidance range. The semiconductor segment showed robust growth, with revenue at $413 million, up 18% year-over-year. Electronics and packaging revenue came in at $253 million, also at the high end, driven by strong sales in flexible and rigid PCB equipment. Specialty industrial revenues were $270 million, above the midpoint of guidance, though the automotive market showed some softness. For the second quarter, MKS expects total revenue to be around $925 million, with semiconductor revenue at $415 million and electronics and packaging at $240 million. Anticipated gross margin is 46.5%, with tariff-related costs potentially impacting this by up to 100 basis points. The company maintains a strong balance sheet, with $1.3 billion in liquidity, and plans further debt prepayment in the current quarter, while continuing to manage its operational expenses.MKS Instruments Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
MKS Instruments Announces Executive Changes and Name Update
Neutral
May 15, 2025
On May 12, 2025, MKS Instruments announced key executive appointments effective August 1, 2025, with James A. Schreiner becoming Executive Vice President and Chief Operating Officer and David P. Henry taking on the role of Executive Vice President, Global Strategic Marketing and General Manager, Materials Solutions Division. These appointments are accompanied by salary increases and stock unit awards for the executives. Additionally, at the 2025 Annual Meeting, shareholders approved amendments to the company’s Restated Articles of Organization and By-Laws to lower voting requirements and change the company’s name to MKS Inc., effective May 16, 2025. This change reflects the company’s expanded market presence and capabilities.
The most recent analyst rating on (MKSI) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on MKS Instruments stock, see the MKSI Stock Forecast page.
Spark’s Take on MKSI Stock
According to Spark, TipRanks’ AI Analyst, MKSI is a Outperform.
MKS Instruments’ overall stock score reflects strong financial performance and positive earnings call results, particularly in semiconductor growth and debt management. However, technical indicators suggest caution due to potential overbought conditions. The valuation appears high, which may limit upside potential. Risks include tariff impacts and softness in certain markets.
To see Spark’s full report on MKSI stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.