AXT (AXTI) AI Stock Analysis

• Market Cap: $326.10M
• Dividend Yield: N/A
• Average Volume (3M): 2.11M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.56
• Revenue Growth: -2.63%
• EPS Growth: -78.66%
• Country: US
• Employees: 1,527
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.15
• Shares Outstanding: 46,124,935
• 10 Day Avg. Volume: 2,350,511
• 30 Day Avg. Volume: 2,108,466
• PEG Ratio: 0.23
• Price to Book (P/B): 0.49
• Price to Sales (P/S): 0.94
• P/FCF Ratio: -5.24
• Enterprise Value/Market Cap: 0.55
• Enterprise Value/Revenue: 2.08
• Enterprise Value/Gross Profit: 17.40
• Enterprise Value/Ebitda: -12.22
• 1Y Price Target: $4.88
• Price Target Upside: -30.98% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 57 Neutral
• Price Target: $6.50 ▼(-8.06% Downside)

AXT's overall stock score is primarily impacted by its financial performance and valuation challenges. Despite strong technical momentum, the company's negative profitability and cash flow issues weigh heavily on its score. The technical analysis suggests potential for short-term gains, but the overbought condition may lead to volatility. Valuation concerns, particularly the negative P/E ratio, further contribute to the lower score.

Positive Factors

AI-Related Demand

The surge in AI-related demand for indium phosphide substrates indicates a growing market segment, potentially boosting long-term revenue and solidifying AXT's position in the semiconductor materials industry.

Gross Margin Improvement

The improvement in gross margins reflects effective cost management and operational efficiencies, which can enhance profitability and provide a stronger financial foundation for future growth.

Export License Acquisition

Securing an export license for indium phosphide opens new international markets, diversifying revenue streams and reducing reliance on domestic sales, which is crucial for long-term stability.

Negative Factors

Revenue Decline

The decline in revenue highlights ongoing challenges in market demand and competitive pressures, which could impact long-term growth prospects and necessitate strategic adjustments.

Continued Net Losses

Persistent net losses indicate financial instability and may hinder the company's ability to invest in growth initiatives, affecting its competitive position and operational sustainability.

Geopolitical Challenges

Geopolitical tensions and trade restrictions create uncertainty and operational risks, potentially disrupting supply chains and limiting market access, which could adversely affect long-term business performance.

AXT Business Overview & Revenue Model

Company Description

AXT Inc. (AXTI) is a leading manufacturer of compound semiconductor substrates, primarily focused on the production of indium phosphide (InP) and gallium arsenide (GaAs) substrates. The company serves various sectors including telecommunications, consumer electronics, and industrial applications, providing critical materials for high-performance electronic and optoelectronic devices. AXT's core products are utilized in a range of applications such as fiber-optic communications, solar cells, and LED technology, positioning the company as a key player in the semiconductor materials market.

How the Company Makes Money

AXT generates revenue through the sale of its semiconductor substrates, with key revenue streams coming from its high-purity InP and GaAs substrates. The company markets its products to a diverse range of customers, including manufacturers of optoelectronic devices and technology firms involved in telecommunications and data communications. AXT's revenue model is primarily driven by product sales, with pricing influenced by market demand and technological advancements. Additionally, strategic partnerships with key industry players and ongoing investment in research and development contribute to enhancing its product offerings and expanding its market reach, ultimately supporting its earnings.

AXT Financial Statement Overview

Summary

AXT is facing financial challenges with declining revenue and profitability, negative cash flow, and operational inefficiencies. Despite a stable balance sheet with moderate leverage, the negative net profit and EBIT margins, along with poor cash conversion efficiency, highlight significant financial concerns.

Income Statement

AXT has faced a challenging period with declining revenue over the last year, dropping from $99.36M to $96.03M on a TTM basis. The company exhibits negative net profit and EBIT margins, indicating operational inefficiencies. Gross profit margin has also decreased from 23.99% to 17.18%, showing reduced profitability. These factors suggest weak income statement performance.

Balance Sheet

AXT maintains a relatively healthy balance sheet with a debt-to-equity ratio of 0.30, reflecting moderate leverage. The equity ratio stands at 55.50%, indicating a solid equity base. However, the return on equity has turned negative, highlighting profitability concerns. Overall, the balance sheet shows financial stability but is impacted by profitability issues.

Cash Flow

The cash flow statement reveals negative free cash flow, although the free cash flow has slightly improved from the previous year. Operating cash flow remains negative, signaling ongoing cash management challenges. The free cash flow to net income ratio is concerning, as both figures are negative, indicating poor cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	86.08M	99.36M	75.80M	141.12M	137.39M	95.36M
Gross Profit	10.28M	23.84M	13.32M	52.12M	47.41M	30.27M
EBITDA	-14.64M	-338.00K	-8.78M	30.12M	25.10M	11.63M
Net Income	-23.83M	-11.62M	-17.88M	15.81M	14.57M	3.24M
Balance Sheet
Total Assets	329.00M	339.31M	358.70M	370.07M	332.44M	298.86M
Cash, Cash Equivalents and Short-Term Investments	35.11M	22.83M	39.89M	44.29M	42.18M	72.84M
Total Debt	58.19M	49.78M	55.73M	48.88M	16.54M	13.23M
Total Liabilities	88.37M	84.41M	89.56M	80.33M	52.21M	43.33M
Stockholders Equity	179.71M	192.77M	203.99M	221.61M	211.53M	192.62M
Cash Flow
Free Cash Flow	-13.97M	-17.88M	-7.07M	-37.23M	-32.95M	-13.99M
Operating Cash Flow	-12.07M	-12.11M	3.40M	-8.77M	-3.31M	5.87M
Investing Cash Flow	-1.61M	-4.45M	-2.60M	-25.22M	-38.81M	-16.42M
Financing Cash Flow	2.35M	-536.00K	8.61M	38.03M	5.72M	52.66M

AXT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXTI, the sentiment is Positive. The current price of 7.07 is above the 20-day moving average (MA) of 5.22, above the 50-day MA of 4.28, and above the 200-day MA of 2.44, indicating a bullish trend. The MACD of 0.57 indicates Negative momentum. The RSI at 73.73 is Negative, neither overbought nor oversold. The STOCH value of 93.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AXTI.

AXT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVEC	―	$348.28M	25.31	22.20%	5.54%	-9.48%	-14.28%
MRAM	―	$245.48M	142.76	2.76%	―	-11.27%	-9.20%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AXTI	―	$326.10M	―	-12.56%	―	-2.63%	-78.66%
XPER	―	$308.56M	-78.29	-0.92%	―	-6.09%	97.33%
ATOM	―	$99.80M	-4.69	-116.86%	―	-94.26%	3.20%
VLN	―	$180.78M	―	-24.56%	―	8.70%	-13.95%

AXT Corporate Events

AXT Subsidiary Secures Export Permits in China

In August 2025, Beijing Tongmei Xtal Technology Co., Ltd., a subsidiary of AXT, Inc., received export permits from the Ministry of Commerce of China to resume shipping indium phosphide substrates to additional customers, following export control restrictions announced in February 2025. This development is expected to generate several million dollars in revenue not included in the company’s third-quarter forecast, potentially impacting the company’s financial performance positively.

The most recent analyst rating on (AXTI) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on AXT stock, see the AXTI Stock Forecast page.

AXT Appoints Leonard J. Leblanc to Board

AXT, Inc. recently appointed Leonard J. Leblanc to its Board of Directors, filling a vacancy left by the passing of Ms. Christine Russell. Mr. Leblanc, who has a rich history with the company and extensive experience in finance and corporate governance, will serve as a Class III director until July 2027. His familiarity with AXT’s operations and strategic needs is seen as crucial during this critical period. Additionally, Jesse Chen has been appointed as the Chair of the Audit Committee, bringing his expertise as an ‘audit committee financial expert’ to the role.

The most recent analyst rating on (AXTI) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on AXT stock, see the AXTI Stock Forecast page.

AXT Inc. Earnings Call: Mixed Signals Amid Challenges

The recent earnings call for AXT Inc. painted a mixed picture for the company. While there were positive developments such as a recovery in gross margins and a surge in AI-related demand, these were overshadowed by significant revenue declines and ongoing challenges with export permits. The sentiment during the call was cautious, reflecting concerns over geopolitical factors affecting revenue and continued net losses.

AXT, Inc. Reports Q2 2025 Financial Results

AXT, Inc. is a material science company specializing in the development and manufacturing of high-performance compound semiconductor substrate wafers, such as indium phosphide, gallium arsenide, and germanium, which are used in various advanced technology applications.