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Veeco Instruments Inc. (VECO)
NASDAQ:VECO
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Veeco
(NASDAQ:VECO)
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Rating:70Neutral
Price Target:
$27.00
▼(-14.58% Downside)
Veeco's overall stock score reflects its strong earnings performance and positive technical indicators, which are somewhat offset by valuation concerns and challenges in revenue growth. The company's strategic initiatives in the semiconductor sector and expanded credit facility provide a solid foundation for future growth.
Positive Factors
Strong Financial Performance
Exceeding revenue guidance indicates robust demand for Veeco's products, particularly in the semiconductor segment, which supports long-term growth potential.
Growth in Semiconductor Segment
Strong growth in the semiconductor segment underscores Veeco's competitive positioning and ability to capitalize on industry trends like AI and high-performance computing.
Improved Gross Margin
Improved gross margins reflect effective cost management and a favorable product mix, enhancing profitability and financial stability.
Negative Factors
Revenue Decline
A decline in revenue suggests potential challenges in maintaining growth momentum, which could impact long-term financial performance if not addressed.
China Revenue Decrease
Reduced revenue from China highlights geopolitical and market risks that could affect Veeco's global revenue diversification strategy.
Global Trade and Tariff Impacts
Tariff-related cost increases can pressure margins, potentially affecting profitability and necessitating strategic adjustments to mitigate impacts.
Veeco (VECO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.90B
Dividend YieldN/A
Average Volume (3M)1.10M
Price to Earnings (P/E)31.2
Beta (1Y)1.73
Revenue Growth-0.19%
EPS Growth-28.72%
CountryUS
Employees1,231
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.36
Shares Outstanding60,159,115
10 Day Avg. Volume1,348,245
30 Day Avg. Volume1,095,890
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.60
Enterprise Value/Revenue1.62
Enterprise Value/Gross Profit3.90
Enterprise Value/Ebitda12.67
Forecast
1Y Price Target
$29.33Price Target Upside-7.21% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Veeco Business Overview & Revenue Model
Company DescriptionVeeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor and thin film process equipment primarily to make electronic devices worldwide. The company offers laser annealing, ion beam deposition and etch, metal organic chemical vapor deposition, single wafer wet processing and surface preparation, molecular beam epitaxy, and atomic layer deposition and other deposition systems, as well as packaging lithography equipment. Its process equipment systems are used in the production of a range of microelectronic components, including logic, dynamic random-access memory, photonics devices, power electronics, radio frequency filters and amplifiers, magnetic heads for hard disk drives, and other semiconductor devices. In addition, the company markets and sells its products to integrated device manufacturers and foundries; outsourced semiconductor assembly and test, hard disk drive, and photonics manufacturers; and research centers and universities. Veeco Instruments Inc. was founded in 1945 and is headquartered in Plainview, New York.
How the Company Makes MoneyVeeco generates revenue primarily through the sale of its semiconductor equipment and services. The company has a diverse revenue model that includes the sale of new equipment, recurring revenue from spare parts, and service contracts. Key revenue streams include systems for MBE, ALD, and etch processes, which are sold to manufacturers in the semiconductor and LED markets. Additionally, Veeco has established significant partnerships with leading technology companies and research institutions, enhancing its market reach and enabling collaborative innovations. The company also benefits from increasing demand for advanced semiconductor solutions, driven by trends such as 5G, artificial intelligence, and electric vehicles, which further supports its revenue growth.
Veeco Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of strong financial performance and challenges. While the semiconductor segment showed significant growth, overall revenue experienced a year-over-year decline. Challenges included decreased revenue from China and increased costs due to tariffs. However, the company's strong financial metrics and cash position, along with growth in key regions and segments, indicate resilience and potential for future growth.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Veeco delivered strong financial performance, exceeding the high end of guidance with revenue totaling $166 million, non-GAAP operating income of $23 million, and non-GAAP EPS of $0.36. The semiconductor business posted record revenue for advanced packaging systems, driven by growing demand from AI.
Growth in Semiconductor Segment
The semiconductor business grew 13% year-over-year, representing 75% of total revenue. Growth was led by strong performance in ion beam systems for EUV mask blanks, wet processing, and lithography systems for advanced packaging applications.
Revenue by Region
Revenue from the Asia Pacific region, excluding China, increased to 59%, led by sales in Taiwan and Southeast Asia for advanced packaging and ion beam deposition for EUV mask blanks.
Improved Gross Margin
Gross margin totaled approximately 43%, above the high end of guidance, with favorable impacts from higher volume and improved product mix.
Strong Cash Position
Veeco ended the quarter with cash and short-term investments of $355 million, a sequential increase from $353 million.
Negative Updates
Revenue Decline
Revenue was slightly down sequentially and decreased by 6% from the prior year.
China Revenue Decrease
Revenue from China customers decreased in Q2 from Q1, with the percentage of revenue decreasing to 17% from 42%.
Data Storage Revenue Decline
Data storage revenue totaled $12 million, declining year-over-year, although service revenue increased reflecting higher customer utilization.
Global Trade and Tariff Impacts
Veeco is experiencing increased costs from tariffs on imported materials, impacting gross margin by approximately 100 basis points.
Company Guidance
During the fiscal call, Veeco provided guidance indicating strong financial performance, exceeding the high end of their guidance with revenue totaling $166 million and a non-GAAP EPS of $0.36. The semiconductor business showed robust growth, accounting for 75% of total revenue, driven by record revenue for advanced packaging systems and increased demand for ion beam deposition systems. The company projects potential SAM growth across various segments, with annealing SAM anticipated to grow to approximately $1.3 billion by 2029, and ion beam deposition SAM expected to reach $350 million for critical film performance by the same year. For Q3, Veeco expects revenue between $150 million and $170 million, with a gross margin of 40% to 42% and non-GAAP diluted EPS between $0.20 and $0.35. These projections consider global trade dynamics, including tariffs, which are estimated to impact gross margins by 100 basis points. Additionally, Veeco's strategic focus on AI and high-performance computing is expected to drive demand for their technologies, supporting significant growth potential beyond 2025.Veeco Financial Statement Overview
Summary
Veeco demonstrates solid financial performance with consistent revenue growth and profitability. The Income Statement shows robust gross and net profit margins, though rising operational costs are a concern. The Balance Sheet reflects effective debt management and a strong equity base. Cash Flow indicates improved cash generation, though there's room for better cash conversion efficiency.Income Statement
Veeco demonstrates a solid financial performance with a consistent growth trajectory, evident from its increasing Total Revenue over recent years. The Gross Profit Margin has remained robust at around 41.6% for TTM, while the Net Profit Margin improved significantly to 8.98% for TTM. Revenue growth has been positive throughout the years, indicating strong demand and effective market strategies. However, the decline in EBIT Margin from 9.34% in 2024 to 8.4% in TTM suggests increased operational costs. Overall, the Income Statement reflects a company with good revenue growth and profitability, although there are some concerns over rising operational expenses.65
Positive
Balance Sheet
Veeco's balance sheet shows a stable financial position with an improving Debt-to-Equity Ratio, now at 0.35, indicating effective debt management. The Equity Ratio improved to 63.5% in TTM, reflecting a strong equity base and financial stability. Return on Equity (ROE) also improved to 7.86% for TTM, indicating efficient use of equity capital. While the company has managed to strengthen its equity position and reduce relative debt, maintaining these improvements will be crucial for future financial resilience.70
Positive
Cash Flow
The cash flow analysis reveals a positive trend in Free Cash Flow, which grew by 21.6% from 2024 to TTM, indicating better cash management and operational efficiency. The Operating Cash Flow to Net Income Ratio remains healthy, suggesting effective conversion of profits into cash. However, the Free Cash Flow to Net Income Ratio, while positive, indicates room for improvement in translating net income into free cash. Overall, the cash flow performance appears robust, although there are opportunities to enhance cash conversion efficiency.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 700.33M | 717.30M | 666.43M | 646.14M | 583.28M | 454.16M |
| Gross Profit | 290.39M | 304.00M | 285.06M | 263.15M | 242.27M | 194.30M |
| EBITDA | 89.30M | 105.02M | 8.40M | 85.94M | 82.77M | 54.64M |
| Net Income | 60.60M | 73.71M | -30.37M | 166.94M | 26.04M | -8.39M |
Balance Sheet | ||||||
| Total Assets | 1.27B | 1.25B | 1.23B | 1.13B | 898.98M | 898.06M |
| Cash, Cash Equivalents and Short-Term Investments | 354.79M | 344.31M | 305.44M | 302.41M | 223.93M | 319.40M |
| Total Debt | 262.77M | 314.27M | 310.50M | 308.24M | 262.27M | 327.42M |
| Total Liabilities | 418.51M | 480.81M | 556.60M | 550.36M | 461.35M | 489.69M |
| Stockholders Equity | 856.20M | 770.77M | 672.44M | 577.82M | 437.63M | 408.37M |
Cash Flow | ||||||
| Free Cash Flow | 55.51M | 45.70M | 33.74M | 83.88M | 27.10M | 36.22M |
| Operating Cash Flow | 75.03M | 63.81M | 61.67M | 108.48M | 67.74M | 43.02M |
| Investing Cash Flow | -51.27M | -64.55M | -53.33M | -68.88M | 44.53M | -71.79M |
| Financing Cash Flow | -9.34M | -12.58M | -4.68M | -4.55M | -122.03M | 29.10M |
Veeco Technical Analysis
Positive
31.61
Price Trends
25.29
Positive
22.97
Positive
22.93
Positive
Market Momentum
2.03
Negative
71.64
Negative
74.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VECO, the sentiment is Positive. The current price of 31.61 is above the 20-day moving average (MA) of 28.44, above the 50-day MA of 25.29, and above the 200-day MA of 22.93, indicating a bullish trend. The MACD of 2.03 indicates Negative momentum. The RSI at 71.64 is Negative, neither overbought nor oversold. The STOCH value of 74.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VECO.
Veeco Risk Analysis
Veeco disclosed 32 risk factors in its most recent earnings report. Veeco 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
Veeco Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.44B | 13.82 | 9.89% | ― | -1.79% | -22.58% | |
70 Neutral | $1.90B | 31.18 | 7.83% | ― | -0.19% | -28.72% | |
66 Neutral | $1.51B | 20.14 | 8.64% | 4.29% | -2.16% | -2.77% | |
62 Neutral | $1.54B | ― | -20.63% | ― | 9.79% | 10.28% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
50 Neutral | $1.67B | ― | -32.05% | ― | -25.65% | -130.95% | |
48 Neutral | $1.43B | ― | -37.97% | ― | -15.65% | -7.18% |
* Technology Sector Average
VECO
Veeco
31.61
-1.02
-3.13%
HIMX
Himax Technologies
8.63
2.97
52.47%
MXL
Maxlinear
16.45
3.09
23.13%
PLAB
Photronics
24.40
-0.16
-0.65%
LASR
nLIGHT
30.85
19.79
178.93%
NVTS
Navitas Semiconductor
7.82
5.40
223.14%
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.