Photronics, Inc.: Gathering momentum, but may lack support

Photronics, Inc. relative valuation is OVERVALUED and it has a fundamental analysis score of 29.

Our analysis is based on comparing Photronics, Inc. with the following peers – Micron Technology, Inc., AXT, Inc., Axcelis Technologies, Inc., SunEdison, Inc., United Microelectronics Corp. Sponsored ADR, IKONICS Corporation and ASML Holding NV ADR (MU-US, AXTI-US, ACLS-US, SUNEQ-US, UMC-US, IKNX-US and ASML-US).

Photronics, Inc. has shown excellent performance overall, both over the last one year as well as over the last month. In fact, Photronics, Inc.’s price momentum over the last month, at 9.42% has been better than that over the last year, which was 3.47%. Also from a peer group perspective, Photronics, Inc. has performed better, since the peer group performance was 0.71% over the last month.

Company Snapshot

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It trades at a lower Price/Book multiple (0.83) than its peer median (1.64).
  • The market expects faster earnings growth from PLAB-US than from its peers and also a turnaround in its current ROE.
  • PLAB-US has relatively low profit margins and median asset efficiency.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • Over the last five years, PLAB-US’s return on assets has declined from about median to less than the median among its peers suggesting that the company’s historical competitiveness in operations is slipping away.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • While PLAB-US’s revenues have increased slower than peer median, the market currently gives the company a higher than peer median P/E ratio and may be factoring in some sort of a strategic play.
  • The company’s level of capital investment is relatively low and suggests it is milking the business.
  • Our analysis rates Photronics, Inc. as OVERVALUED relative to its peers.

Share Price Performance

Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.

PLAB-US’s share price performance of 3.47% over the last 12 months is below its peer median but its 30-day trend in share price performance of 9.42% is better than the peer median. This recent rising stock price may herald a change in relative share price performance.

Share Price Performance

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Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

Photronics, Inc.’s price of USD 10.45 is greater than CapitalCube’s implied price of USD 8.47. At this level, CapitalCube believes that Photronics, Inc. is overvalued. Over the last 52 week period, the stock has fluctuated between USD 7.55 and USD 12.10.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

Photronics, Inc. manufacturers and sells photomasks, which are high precision photographic quartz plates containing microscopic images of electronic circuits. Its photomasks are a key element in the manufacture of semiconductors and flat panel displays and are used as masters to transfer circuit patterns onto semiconductor wafers and flat panel substrates during the fabrication of integrated circuits and a variety of flat panel displays and to a lesser extent other types of electrical and optical components. The company was founded by Constantine S. Macricostas in 1969 and is headquartered in Brookfield, CT.

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