Education
About Us
Working with TipRanks
Follow Us
AXT Inc (AXTI)
NASDAQ:AXTI
Top Page
AXT
(NASDAQ:AXTI)
47Neutral
Positive Factors
Revenue Growth
Revenue exceeded expectations due to strong demand from data centers and growth in the raw materials business.
Negative Factors
Earnings Performance
Earnings per share were lower than expected due to some gross margin challenges.
Trade Restrictions Impact
Guidance for the upcoming quarter was below expectations primarily because of trade restrictions on InP imposed by China.
AXT (AXTI) vs. S&P 500 (SPY)
Market Cap
$72.50M
Dividend YieldN/A
Average Volume (3M)969.54K
Price to Earnings (P/E)―
Beta (1Y)2.54
Revenue Growth15.24%
EPS Growth21.83%
CountryUS
Employees1,456
SectorTechnology
Sector Strength45
IndustrySemiconductors and Equipment
Share Statistics
EPS (TTM)-0.27
Shares Outstanding44,750,580
10 Day Avg. Volume945,878
30 Day Avg. Volume969,537
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.77
Price to Cash Flow (P/CF)-3.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.25Price Target Upside228.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
AXT Business Overview & Revenue Model
Company DescriptionAXT, Inc. engages in the design, development, manufacture, and distribution of compound and single element semiconductor substrates. It also sells specialty material substrates and raw materials used to make substrates and other related products. The company was founded by Morris S. Young and Davis Zhang in December 1986 and is headquartered in Fremont, CA.
How the Company Makes MoneyAXT makes money through the sale of its semiconductor substrates to a diverse range of customers, including manufacturers of LEDs, lasers, solar cells, and other electronic devices. The company's revenue model is primarily based on product sales, and its key revenue streams are derived from the demand in the telecommunications and consumer electronics industries. AXT also benefits from partnerships and collaborations with technology companies and research institutions, enabling it to stay at the forefront of innovation and maintain a competitive edge in the market. Additionally, the company invests in research and development to continuously improve the quality and performance of its substrates, thereby enhancing its market position and revenue potential.
AXT Financial Statement Overview
Summary
AXT shows mixed financial results. While revenue growth is strong, profitability is challenged by negative net profit margins and operational inefficiencies. The balance sheet is stable, but cash flow issues signal liquidity concerns.Income Statement
AXT's TTM (Trailing-Twelve-Months) income statement indicates challenges with profitability, as evidenced by a negative net profit margin of -10.7% and declining gross profit margins. Revenue growth is promising at 24.9% from the last annual report, but the negative EBIT and EBITDA margins highlight ongoing operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet reveals a relatively stable equity base with an equity ratio of 56.5%. However, the debt-to-equity ratio is moderate at 0.28, indicating manageable leverage. The return on equity is negative, which is concerning, but the overall asset base remains strong.60
Neutral
Cash Flow
Cash flow analysis shows negative free cash flow and operating cash flow, indicating liquidity constraints. The operating cash flow to net income ratio is negative, reflecting inefficient cash generation from operations. These factors suggest cash management issues that need addressing.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 94.69M | 75.80M | 141.12M | 137.39M | 95.36M | 83.26M | Gross Profit |
| 24.05M | 13.32M | 52.12M | 47.41M | 30.27M | 24.82M | EBIT |
| -12.20M | -21.57M | 12.55M | 12.90M | -393.00K | -314.00K | EBITDA |
| 1.82M | -8.78M | 20.67M | 19.98M | 8.27M | 5.22M | Net Income Common Stockholders |
| -10.16M | -17.88M | 15.81M | 14.57M | 5.04M | -1.59M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 38.66M | 39.89M | 44.29M | 42.18M | 72.84M | 36.32M | Total Assets |
| 223.52M | 358.70M | 370.07M | 332.44M | 298.86M | 223.35M | Total Debt |
| 0.00 | 55.73M | 48.40M | 16.05M | 12.79M | 8.44M | Net Debt |
| -16.53M | 17.98M | 13.45M | -20.71M | -59.82M | -18.45M | Total Liabilities |
| 28.99M | 89.56M | 80.33M | 52.21M | 43.33M | 30.59M | Stockholders Equity |
| 190.84M | 203.99M | 221.61M | 211.53M | 192.62M | 187.88M |
| Cash Flow | Free Cash Flow | ||||
| -16.85M | -7.07M | -37.23M | -32.95M | -13.99M | -9.13M | Operating Cash Flow |
| -11.95M | 3.40M | -8.77M | -3.31M | 5.87M | 12.66M | Investing Cash Flow |
| -1.76M | -2.60M | -25.22M | -38.81M | -16.42M | -8.33M | Financing Cash Flow |
| 10.87M | 8.61M | 38.03M | 5.72M | 52.66M | 6.19M |
AXT Technical Analysis
Negative
1.60
Price Trends
1.99
Negative
2.11
Negative
2.55
Negative
Market Momentum
-0.13
Negative
42.26
Neutral
69.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXTI, the sentiment is Negative. The current price of 1.6 is below the 20-day moving average (MA) of 1.73, below the 50-day MA of 1.99, and below the 200-day MA of 2.55, indicating a bearish trend. The MACD of -0.13 indicates Negative momentum. The RSI at 42.26 is Neutral, neither overbought nor oversold. The STOCH value of 69.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AXTI.
AXT Risk Analysis
AXT disclosed 58 risk factors in its most recent earnings report. AXT 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
AXT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
64 Neutral | $7.50B | 138.48 | -9.49% | ― | 26.40% | -234.22% | |
63 Neutral | $10.97B | 22.08 | 8.34% | 4.07% | -12.91% | -42.12% | |
58 Neutral | $21.35B | 9.96 | -19.72% | 2.38% | 5.03% | -22.83% | |
55 Neutral | $6.64B | 251.18 | 0.77% | ― | 9.51% | ― | |
53 Neutral | $10.30B | ― | 0.88% | ― | 14.61% | 85.44% | |
50 Neutral | $4.29B | ― | -48.63% | ― | -1.72% | -94.98% | |
47 Neutral | $72.50M | ― | -5.86% | ― | 15.24% | 21.83% |
* Technology Sector Average
Performance Comparison
AXTI
AXT
1.60
-3.13
-66.17%
COHR
Coherent Corp
67.32
5.55
8.98%
MTSI
MACOM Technology Solutions Holdings
106.97
15.62
17.10%
SWKS
Skyworks Solutions
67.85
-36.13
-34.75%
QRVO
Qorvo
69.32
-46.81
-40.31%
LITE
Lumentum Holdings
64.02
16.96
36.04%
AXT Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -30.13% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company experiencing significant growth in fiscal 2024, with strong revenue increases and improved margins. However, the fourth quarter presented challenges such as declining gross margins, increased operating expenses, and potential revenue delays due to export restrictions in China. The overall sentiment is cautious optimism, balancing substantial annual progress with notable quarterly setbacks.Highlights
Significant Revenue Growth in Fiscal Year 2024
Revenue for the fiscal year 2024 was $99.4 million, up from $75.8 million in fiscal year 2023, reflecting a 31% increase in revenue driven by growth across all product categories.
Improved Gross Margin and Net Loss
Non-GAAP gross margin for fiscal year 2024 was 24.3%, up from 18.1% in fiscal 2023. GAAP gross margin also improved to 24% from 17.6%. Non-GAAP net loss improved to $8.5 million from $14.3 million in fiscal 2023.
Expansion in Data Center and Wireless Markets
Strong performance in data center infrastructure and wireless handset markets, particularly in China, contributed to revenue growth, with notable advancements in low EPD gallium arsenide and 8-inch gallium arsenide and 6-inch indium phosphide substrates.
Growth in Raw Material Joint Ventures
Revenue from consolidated raw material joint venture companies was $32 million in 2024, up 12% from the previous year, driven by increased demand for materials such as gallium, arsenic, and indium.
Lowlights
Q4 2024 Gross Margin Decline
Non-GAAP gross margin in Q4 2024 was 17.9%, down from 24.3% in Q3 2024 and 23.2% in Q4 2023, primarily due to lower benefits from the recycling program and lower ingot starts.
Higher Operating Expenses
Non-GAAP operating expenses increased to $9.9 million in Q4 2024 from $9.0 million in Q3 2024 and $7.5 million in Q4 2023, primarily due to increased legal and R&D expenses.
Impact of China Export Controls
Trade restrictions on indium phosphide are expected to delay $4 million to $5 million in sales for Q1 2025, affecting revenue from China and requiring an export permit process.
Decrease in Cash and Investments
Cash, cash equivalents, and investments decreased by $5 million to $33.8 million as of December 31, primarily due to reductions in loan balances and non-cash expenses.
Company Guidance
During AXT's Fourth Quarter 2024 Financial Conference Call, the company provided various financial metrics and guidance. For Q4 2024, revenue was $25.1 million, up from $23.6 million in Q3 2024 and $20.4 million in Q4 2023. Product category revenue included $9.1 million from indium phosphide, $5.4 million from gallium arsenide, $1.6 million from germanium substrates, and $9.0 million from consolidated raw material joint ventures. Regional revenue distribution was 79% from Asia Pacific, 11% from Europe, and 10% from North America. Non-GAAP gross margin fell to 17.9% from 24.3% in Q3 2024. Operating expenses rose to $9.9 million, mainly due to increased legal and R&D expenses. The non-GAAP operating loss was $5.4 million, with a net loss of $4.3 million or $0.10 per share. Cash and investments decreased by $5.0 million to $33.8 million. For fiscal year 2024, revenue totaled $99.4 million, a 31% increase from 2023, with a non-GAAP net loss of $8.5 million. Looking ahead to Q1 2025, revenue is expected to range between $18.0 million and $20.0 million, with a non-GAAP net loss between $0.13 and $0.15 per share due to indium phosphide export restrictions impacting sales.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.