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AXT Inc.’s Financial Outlook: The Ripple Effect of Supplier Performance and Joint Venture Volatility
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AXT Inc.’s Financial Outlook: The Ripple Effect of Supplier Performance and Joint Venture Volatility

AXT Inc (AXTI) has disclosed a new risk, in the Corporate Activity and Growth category.

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AXT Inc. stands exposed to financial risks that hinge on the performance of its raw material suppliers, which are integral to its vertically integrated supply chain. Should these suppliers encounter a downturn in revenue, selling prices, margins, or heightened operating costs, AXT Inc.’s overall financial results could be adversely affected. Particularly vulnerable are the contributions from equity-accounted joint ventures, which after adding $1.9 million in 2023 and $6.0 million in 2022, could significantly diminish AXT Inc.’s consolidated earnings. These joint ventures last reported a loss in 2019, which underscores the potential volatility and impact on AXT Inc.’s financial health.

The average AXTI stock price target is $4.76, implying -2.26% downside potential.

To learn more about AXT Inc’s risk factors, click here.

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