IQE plc (IQE) AI Stock Analysis

• Market Cap: £102.13M
• Dividend Yield: N/A
• Average Volume (3M): 6.84M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.35
• Revenue Growth: -24.75%
• EPS Growth: -110.79%
• Country: UK
• Employees: 577
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.02
• Shares Outstanding: 978,259,500
• 10 Day Avg. Volume: 6,643,697
• 30 Day Avg. Volume: 6,841,931
• PEG Ratio: -0.14
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.91
• P/FCF Ratio: -6.04
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: 10.50p ▲(108.75% Upside)

The score is primarily held down by weak financial performance, including ongoing losses, very low gross margin, and deteriorating cash flow alongside rising leverage. Technicals are supportive with strong momentum above moving averages, but the extremely overbought RSI/Stoch readings add pullback risk. Valuation is constrained by negative earnings (negative P/E), with no dividend data to offset the risk profile.

Positive Factors

Leading supplier of advanced semiconductor materials

IQE's status as a specialist supplier of epitaxial wafers and substrates represents a durable business-model advantage. Its technical know‑how and manufacturing capability for compound semiconductors create high barriers to entry, supporting long-term customer stickiness and premium product demand.

Exposure to 5G, IoT and optical device tailwinds

Structural adoption of 5G, IoT and optical applications increases advanced-material content per device. IQE’s product mix aligns with these multi-year secular trends, supporting sustained addressable-market growth and the potential for higher-volume, recurring supply agreements over the medium term.

Diversified revenue streams & research partnerships

A mix of long-term supply contracts, project work and R&D collaborations reduces single-customer risk and supports a steady innovation pipeline. Partnerships with tech firms and institutions enhance product development and provide durable routes to commercialization and repeatable revenue.

Negative Factors

Very low gross margin

A 3.77% gross margin is structurally constraining: it implies limited ability to cover fixed costs, invest in R&D or absorb pricing pressure. Unless manufacturing yields or pricing improve, sustained low gross margins will hinder profitability and capital allocation flexibility over the medium term.

Deteriorating cash generation and negative free cash flow

Persistent negative free cash flow and weak operating cash conversion limit the company’s ability to self-fund capex, scale production or pursue strategic investments. Continued cash burn increases reliance on external financing and constrains long-term operational and strategic flexibility.

Rising leverage with negative returns

Higher leverage combined with negative ROE raises financial risk: debt servicing burdens can amplify earnings volatility and reduce resilience in downturns. This profile can force restrictive liquidity management or dilutive financing choices that impair long-term shareholder value creation.

IQE plc Business Overview & Revenue Model

Company Description

IQE plc develops, manufactures, and sells advanced semiconductor materials. The company operates in three segments: Wireless, Photonics, and CMOS++. It manufactures compound semiconductor wafers or epiwafers using epitaxy process; offers wireless products, including GaAs, GaN, and InP-based technologies, as well as Si and Ge-based epitaxial wafer structures; and supplies GaAs HBTs, pHEMTs, and BiFETs/BiHEMTs for use in consumer mobile handsets, connected devices, 5G network infrastructure, WiFi 6, Bluetooth, and satellite communications. The company also provides photonics products, which include vertical cavity surface emitting lasers, a 3D sensing technology that enables facial recognition, gesture control, light detection and ranging (LiDAR), and other advanced sensing applications; indium phosphide (InP) laser and detector wafers that powers high speed, 5G telecommunication, and data communication fiber optic networks; Gallium Nitride (GaN) and gallium arsenide (GaSb) for multicolor uLED displays; and a range of gallium antimonide (GaSb) and InP materials that enables high definition infrared imaging and sensing in security, health monitoring, and environmental applications. In addition, it offers substrate products, such as GaSb, InP, InAs, InSb, GaSb, CZT, custom size or geometry wafers, polycrystalline materials, high purity group iii/v source materials, and bespoke orientation substrates. Further, the company provides nanoimprint lithography services. The company serves in the United States, rest of the Americas, France, Germany, Israel, the United Kingdom, rest of Europe, the Middle East, Africa, the People's Republic of China, Japan, Taiwan, and rest of the Asia-Pacific. IQE plc was founded in 1988 and is headquartered in Cardiff, the United Kingdom.

How the Company Makes Money

IQE generates revenue primarily through the sale of its semiconductor materials, particularly epitaxial wafers, to a diverse customer base including major technology companies and device manufacturers. The company's revenue model is driven by the high demand for advanced materials in emerging technologies such as 5G telecommunications and Internet of Things (IoT) applications. Key revenue streams include long-term supply agreements with customers, project-based sales for specialized semiconductor applications, and collaborations with research institutions for developing innovative materials. Significant partnerships with leading tech firms and collaborations in research and development also contribute to IQE's earnings by enhancing its product offerings and expanding its market reach.

IQE plc Financial Statement Overview

Summary

IQE plc is facing significant financial challenges. Revenue growth is stagnant, profitability is under pressure with negative margins, and cash flow generation is weak. The balance sheet shows increasing leverage, which could pose risks if operational performance does not improve. The company needs to address cost management and improve operational efficiencies to enhance financial stability.

Income Statement

IQE plc has faced declining revenues, with a 1.5% increase from 2023 to 2024, but a significant drop from 2020 levels. Gross profit margin remains low at 3.77% for 2024, indicating cost pressures. Net profit margin is negative, which is concerning for profitability. The EBIT and EBITDA margins are also negative, reflecting operational challenges and a lack of profitability.

Balance Sheet

The company's debt-to-equity ratio has increased, reaching 0.55 in 2024, suggesting rising financial leverage. Return on Equity is negative due to net losses, indicating poor returns for shareholders. The equity ratio stands at 54.30%, showing a moderate reliance on equity financing, which provides some balance sheet stability.

Cash Flow

The free cash flow growth rate is negative, highlighting deteriorating cash generation capabilities. Operating cash flow to net income ratio is negative due to consistent net losses, indicating cash flow issues. Free cash flow to net income is also negative, underscoring inefficiencies in converting earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	97.27M	118.03M	115.25M	167.50M	154.10M	178.02M
Gross Profit	-2.51M	4.45M	2.33M	26.40M	17.64M	33.15M
EBITDA	-12.33M	-6.22M	-1.11M	-46.68M	5.23M	19.02M
Net Income	-49.14M	-38.18M	-29.38M	-74.50M	-31.00M	-3.27M
Balance Sheet
Total Assets	228.26M	247.05M	273.51M	296.10M	351.22M	371.29M
Cash, Cash Equivalents and Short-Term Investments	16.99M	4.66M	5.62M	11.60M	10.79M	24.66M
Total Debt	86.83M	73.99M	54.15M	77.60M	70.98M	69.76M
Total Liabilities	122.20M	112.94M	103.73M	121.00M	116.60M	110.85M
Stockholders Equity	106.06M	134.11M	169.78M	175.10M	234.62M	260.44M
Cash Flow
Free Cash Flow	-5.08M	-17.72M	-12.20M	-12.00M	-3.00M	22.92M
Operating Cash Flow	2.36M	-2.88M	5.92M	5.90M	15.39M	33.32M
Investing Cash Flow	-6.41M	-10.19M	-17.96M	-10.70M	-18.30M	-11.77M
Financing Cash Flow	13.36M	12.16M	6.63M	4.73M	-11.17M	-5.55M

IQE plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.03
• 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 GB:IQE, the sentiment is Positive. The current price of 5.03 is below the 20-day moving average (MA) of 5.73, below the 50-day MA of 5.46, and below the 200-day MA of 8.20, indicating a bullish trend. The MACD of 0.83 indicates Negative momentum. The RSI at 83.71 is Negative, neither overbought nor oversold. The STOCH value of 93.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:IQE.

IQE plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTC	75 Outperform	£379.40M	28.66	55.98%	―	121.45%	345.83%
KMK	73 Outperform	£79.27M	19.70	7.39%	―	36.61%	―
GHH	67 Neutral	£169.70M	45.42	3.13%	2.19%	10.66%	21.19%
CML	66 Neutral	£44.01M	37.27	2.28%	3.67%	-21.33%	-11.35%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
IQE	48 Neutral	£102.13M	-1.94	-37.55%	―	-24.75%	-110.79%
NANO	44 Neutral	£15.36M	-7.03	―	―	-3.25%	-172.09%

IQE plc Corporate Events

IQE lifts 2025 outlook on defence and AI demand as strategic review draws bidders

IQE reported strong trading momentum in the second half of 2025, driven by faster-than-expected funding for US military and defence programmes, robust photonics demand from AI and data centre markets, and higher wireless sales linked to new handset launches, particularly benefiting its Taiwan operations. The company expects full-year 2025 revenue of about £97m and adjusted EBITDA of at least £2.0m, at the upper end of its prior guidance, supported by improved capacity utilisation, a year-end cash position of £15.6m, and a waiver from HSBC on Q4 2025 EBITDA covenant testing; it enters 2026 with a strong first-quarter order book and is advancing a strategic review that has attracted multiple non-binding offers for the group and certain assets, underscoring investor interest but with no certainty of a transaction.

The most recent analyst rating on (GB:IQE) stock is a Hold with a £7.50 price target. To see the full list of analyst forecasts on IQE plc stock, see the GB:IQE Stock Forecast page.

IQE Updates Total Voting Rights and Employee Share Plan Allotments

IQE plc has confirmed that as of 31 December 2025 its issued share capital comprised 978,263,616 ordinary shares, of which 4,115 are held in treasury, leaving 978,259,501 ordinary shares in issue with voting rights, a figure investors should use for regulatory disclosure calculations under UK transparency rules. The company also reported on its all-employee share option plan block admission for the period from 1 July to 31 December 2025, during which 1,758,054 new ordinary shares were issued under the scheme, reducing the remaining headroom to 4,773,780 shares, underscoring ongoing employee equity participation and providing clarity to shareholders on potential future dilution from option exercises.

The most recent analyst rating on (GB:IQE) stock is a Hold with a £5.00 price target. To see the full list of analyst forecasts on IQE plc stock, see the GB:IQE Stock Forecast page.

IQE Extends Strategic Supply Agreement with Lumentum

IQE plc has announced a multi-year extension of its strategic supply agreement with Lumentum Holdings Inc. This extension builds on their longstanding relationship, leveraging IQE’s VCSEL expertise to advance 3D sensing technologies across Lumentum’s photonics product portfolio. These technologies are crucial for consumer, automotive LiDAR, and in-cabin sensing applications. The agreement is expected to foster further innovation in sensing technologies, expanding their application into new consumer and automotive products, thereby strengthening IQE’s position in the semiconductor industry.

The most recent analyst rating on (GB:IQE) stock is a Hold with a £5.00 price target. To see the full list of analyst forecasts on IQE plc stock, see the GB:IQE Stock Forecast page.

IQE Announces Total Voting Rights Update

IQE plc announced that as of 30 November 2025, its issued share capital consisted of 977,637,531 ordinary shares, with 4,115 shares held in treasury, resulting in 977,633,416 shares with voting rights. This figure is crucial for shareholders to determine their notification requirements under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:IQE) stock is a Hold with a £5.00 price target. To see the full list of analyst forecasts on IQE plc stock, see the GB:IQE Stock Forecast page.

IQE plc Grants Share Options to Executive Chair

IQE plc announced that its Executive Chair, Mark Cubitt, has been granted nil cost share options over 166,667 ordinary shares as part of the company’s Long Term Incentive Plan. This grant is part of a series of options that will total 666,667 shares, subject to a three-year holding period. This move is part of IQE’s strategy to align leadership incentives with long-term company performance, potentially impacting its market positioning by reinforcing executive commitment.

The most recent analyst rating on (GB:IQE) stock is a Hold with a £5.00 price target. To see the full list of analyst forecasts on IQE plc stock, see the GB:IQE Stock Forecast page.

IQE plc Announces Total Voting Rights Update

IQE plc announced that as of 31 October 2025, its issued share capital consists of 977,561,878 ordinary shares, with 4,115 shares held in treasury, resulting in 977,557,763 shares with voting rights. This figure is crucial for shareholders to determine their notification requirements under the Financial Conduct Authority’s rules, reflecting the company’s transparency and regulatory compliance.

The most recent analyst rating on (GB:IQE) stock is a Hold with a £5.50 price target. To see the full list of analyst forecasts on IQE plc stock, see the GB:IQE Stock Forecast page.