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Photronics (PLAB)
NASDAQ:PLAB
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Photronics
(NASDAQ:PLAB)
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Rating:77Outperform
Price Target:
$27.00
▲(10.66% Upside)
Photronics' strong financial stability and bullish technical indicators are the primary drivers of its score. While the company faces challenges in revenue growth and geopolitical risks, its strategic expansions and undervaluation provide a solid foundation for future growth.
Photronics (PLAB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.44B
Dividend YieldN/A
Average Volume (3M)905.86K
Price to Earnings (P/E)13.8
Beta (1Y)1.69
Revenue Growth-1.79%
EPS Growth-22.58%
CountryUS
Employees1,900
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.51
Shares Outstanding59,004,623
10 Day Avg. Volume854,123
30 Day Avg. Volume905,858
Financial Highlights & Ratios
PEG Ratio3.15
Price to Book (P/B)1.26
Price to Sales (P/S)1.62
P/FCF Ratio10.78
Enterprise Value/Market Cap0.68
Enterprise Value/Revenue1.15
Enterprise Value/Gross Profit3.22
Enterprise Value/Ebitda4.57
Forecast
1Y Price Target
$33.00Price Target Upside35.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Photronics Business Overview & Revenue Model
Company DescriptionPhotronics, Inc. (PLAB) is a leading global manufacturer of photomasks, which are essential components in the semiconductor and flat panel display industries. The company specializes in producing high-precision photomasks used in the fabrication of integrated circuits (ICs) and various advanced display technologies. With a focus on innovation and quality, Photronics serves a diverse clientele, including major semiconductor manufacturers and display producers, providing cutting-edge solutions that support the ongoing demand for smaller, more efficient electronic devices.
How the Company Makes MoneyPhotronics generates revenue primarily through the sale of photomasks, which are critical for the production of semiconductor devices and displays. The company's revenue model is based on contracts with semiconductor manufacturers, where they provide custom photomask solutions tailored to specific manufacturing processes. Key revenue streams include sales of photomasks for both advanced nodes in semiconductor fabrication and for flat panel displays. Additionally, Photronics benefits from long-term partnerships with leading semiconductor firms, which ensures a steady demand for their products. The company also invests in research and development to enhance its photomask technology, enabling it to cater to the evolving needs of the semiconductor industry and maintain a competitive edge.
Photronics Earnings Call Summary
Earnings Call Date:Aug 27, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Dec 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. While revenue exceeded expectations and there were notable achievements in the flat panel display market and U.S. operations, challenges in the integrated circuits market and geopolitical factors presented headwinds.Q3-2025 Updates
Positive Updates
Revenue Exceeds Expectations
Photronics reported a third-quarter revenue of $210 million, which was ahead of expectations and flat year-over-year and sequentially.
Strong Cash Flow and Share Repurchase
Operating cash flow was 25% of revenue, and the company repurchased $21 million of stock in the quarter, totaling $97 million year-to-date.
Flat Panel Display Market Growth
Revenue in the flat panel display market increased by 14% year-over-year, driven by strong demand in Korea and China, particularly for higher-end applications with advanced AMOLED technologies.
Strengthened U.S. Operations
Photronics is expanding its capabilities in Texas and Idaho to service increased demand for U.S. midrange and high-end nodes.
High-End IC Revenue Increase
High-end IC revenue represented 36% of total IC revenue and increased 8% year-over-year, driven by strong order patterns in the United States.
Negative Updates
Decline in Integrated Circuits Revenue
IC revenue of $148 million declined 5% year-over-year, with a significant decline in mainstream IC revenue, particularly in Asia.
Geopolitical and Trade Challenges
Geopolitical trade restrictions and unresolved tariff negotiations have impacted demand and design release from customers in Asia.
Limited Visibility and Uneven Demand
Photronics noted that demand for their products is inherently uneven and difficult to predict, with limited visibility and a typical backlog of 1 to 3 weeks.
Company Guidance
In the fiscal third quarter of 2025, Photronics reported strong financial results, with sales reaching $210 million, remaining flat both year-over-year and sequentially. The company recorded a non-GAAP diluted EPS of $0.51, surpassing previous guidance. Operating cash flow for fiscal 2025 to date was 25% of revenue, contributing to a robust balance sheet with $576 million in cash and short-term investments. Photronics also repurchased $21 million of stock during the quarter, totaling $97 million in buybacks year-to-date. The company is investing in geographic revenue diversification, including expanding its Texas facility to meet U.S. midrange node demand and enhancing its high-end production capabilities in Idaho. In the integrated circuits market, Photronics saw a 5% year-over-year decline in revenue to $148 million, while the flat panel display segment grew 14% year-over-year to $63 million, driven by strong demand in Korea and China. The company's fourth-quarter revenue is anticipated to range between $201 million and $209 million, with non-GAAP EPS expected to be between $0.42 and $0.48 per diluted share.Photronics Financial Statement Overview
Summary
Photronics demonstrates strong profitability and financial stability, with efficient operations and low leverage. However, recent declines in revenue and free cash flow growth present challenges that need to be addressed to sustain long-term growth.Income Statement
Photronics shows strong profitability with a consistent gross profit margin around 35-37% and a net profit margin of 12-15% over the years. However, recent revenue growth has been negative, indicating potential challenges in maintaining sales momentum. The EBIT and EBITDA margins are healthy, reflecting efficient cost management.75
Positive
Balance Sheet
The company maintains a very low debt-to-equity ratio, indicating strong financial stability and low leverage risk. Return on equity has decreased over time but remains respectable. The equity ratio is solid, suggesting a strong capital structure with a high proportion of equity financing.80
Positive
Cash Flow
Operating cash flow is robust relative to net income, indicating good cash generation from operations. However, free cash flow growth has been negative recently, which could impact future investments. The free cash flow to net income ratio is moderate, suggesting room for improvement in cash flow efficiency.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 856.15M | 866.95M | 892.08M | 824.55M | 663.76M | 609.69M |
| Gross Profit | 306.60M | 315.95M | 336.16M | 294.21M | 167.04M | 134.65M |
| EBITDA | 215.64M | 330.55M | 351.21M | 321.22M | 194.09M | 157.78M |
| Net Income | 108.47M | 130.69M | 125.48M | 179.24M | 78.82M | 33.82M |
Balance Sheet | ||||||
| Total Assets | 1.75B | 1.71B | 1.53B | 1.32B | 1.29B | 1.19B |
| Cash, Cash Equivalents and Short-Term Investments | 575.80M | 640.67M | 512.21M | 358.50M | 276.67M | 278.67M |
| Total Debt | 27.00K | 22.96M | 26.53M | 42.33M | 111.69M | 70.83M |
| Total Liabilities | 214.76M | 231.30M | 250.61M | 253.74M | 293.64M | 225.92M |
| Stockholders Equity | 1.13B | 1.12B | 975.01M | 831.53M | 823.69M | 804.96M |
Cash Flow | ||||||
| Free Cash Flow | 64.55M | 130.50M | 170.88M | 162.85M | 41.50M | 72.07M |
| Operating Cash Flow | 228.34M | 261.44M | 302.18M | 275.19M | 150.77M | 143.05M |
| Investing Cash Flow | -188.01M | -156.47M | -101.55M | -147.76M | -103.49M | -65.71M |
| Financing Cash Flow | -116.59M | -7.73M | -18.49M | -38.69M | -53.90M | -16.01M |
Photronics Technical Analysis
Positive
24.40
Price Trends
22.16
Positive
20.64
Positive
21.04
Positive
Market Momentum
0.53
Positive
60.20
Neutral
52.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PLAB, the sentiment is Positive. The current price of 24.4 is above the 20-day moving average (MA) of 23.55, above the 50-day MA of 22.16, and above the 200-day MA of 21.04, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 60.20 is Neutral, neither overbought nor oversold. The STOCH value of 52.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PLAB.
Photronics Risk Analysis
Photronics disclosed 1 risk factors in its most recent earnings report. Photronics reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Photronics 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% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $942.04M | ― | -10.09% | ― | -21.27% | -207.30% | |
55 Neutral | $1.32B | 38.78 | -19.47% | ― | 14.28% | -1644.64% | |
48 Neutral | $1.43B | ― | -37.97% | ― | -15.65% | -7.18% |
* Technology Sector Average
PLAB
Photronics
24.40
-0.16
-0.65%
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Photronics Corporate Events
Executive/Board Changes
Photronics Amends CEO Employment Agreement
Neutral
Jul 2, 2025
On June 27, 2025, Photronics, Inc. announced an amended employment agreement with its CEO, George C. Macricostas, effective from May 28, 2025. The agreement outlines his compensation, including a base salary of $675,000 and eligibility for annual bonuses, and specifies terms for termination benefits and non-compete clauses, impacting the company’s leadership stability and strategic focus.
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.