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Kulicke & Soffa (KLIC)
NASDAQ:KLIC

Kulicke & Soffa (KLIC) AI Stock Analysis

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Kulicke & Soffa

(NASDAQ:KLIC)

50Neutral
Kulicke & Soffa's stock score reflects a mix of financial challenges and potential recovery opportunities. The company's strong balance sheet and cash flow resilience are offset by declining revenues and profitability. Technical indicators suggest bearish momentum, while the high P/E ratio indicates overvaluation. Optimism from the earnings call and share repurchase programs provides some positive outlook, but the cessation of the EA equipment business adds a negative impact.
Positive Factors
Financial Performance
NG GM of 52.7% and NG EPS of $0.37 came in above the consensus estimates.
Market Potential
China is viewed as an upside driver because the massive front-end capacity buildout in China will eventually lead to back-end capacity investments in the country.
Strategic Initiatives
New $300M share repurchase authorization is a positive and total buyback capacity is ~$330M entering the Dec Q.
Negative Factors
Market Conditions
Soft F1Q outlook despite improving end markets, with revenue guidance well below the Street view.
Market Demand
Tepid demand for core ball bonders and wedge bonders with uncertain timing and slope of recovery.
Revenue Guidance
Dec Q revenues were guided -9% Q/Q, and below prior expectations for approx. similar to Sep Q levels.

Kulicke & Soffa (KLIC) vs. S&P 500 (SPY)

Kulicke & Soffa Business Overview & Revenue Model

Company DescriptionKulicke & Soffa Industries, Inc. (KLIC) is a leading provider of semiconductor, LED, and electronic assembly solutions. The company serves a diverse range of markets by designing, manufacturing, and selling capital equipment and tools used in the production of semiconductor devices. Its core products include wire bonding, advanced packaging, and electronic assembly solutions, which are crucial for the production of microchips and other electronic components. Headquartered in Singapore, Kulicke & Soffa has a global presence, catering to the needs of a wide array of clients in the electronics industry.
How the Company Makes MoneyKulicke & Soffa generates revenue primarily through the sale of its semiconductor and electronic assembly equipment. The company earns money by selling capital equipment, tools, and consumables required for semiconductor manufacturing processes. Key revenue streams include sales of wire bonding equipment, advanced packaging solutions, and aftermarket products such as spares and services. Additionally, Kulicke & Soffa benefits from strategic partnerships and collaborations with semiconductor manufacturers and industry leaders, which enhance its market reach and drive sales growth. The company's earnings are also influenced by the demand for semiconductor devices, which affects the purchasing behavior of its customers in the electronics manufacturing sector.

Kulicke & Soffa Financial Statement Overview

Summary
Kulicke & Soffa is facing financial stress with declining revenues and minimal profitability. However, the company maintains a strong balance sheet with low leverage and a solid equity base. Cash flow metrics show resilience, suggesting effective cash management amidst operational difficulties.
Income Statement
45
Neutral
Kulicke & Soffa's income statement reveals a challenging period. The TTM (Trailing-Twelve-Months) Gross Profit Margin stands at 47.35%, which is quite robust. However, the Net Profit Margin is a mere 0.48%, indicating minimal profitability. Revenue has decreased notably from $1.5 billion in 2021 to $701 million in the TTM, reflecting a significant contraction in sales. The EBIT Margin is 5.69%, and EBITDA Margin is 3.64%, both showing a steep decline from past performance, suggesting operational challenges and cost management issues.
Balance Sheet
70
Positive
The balance sheet indicates a strong equity position with a Debt-to-Equity Ratio of 0.04, demonstrating low leverage. The Return on Equity (ROE) for the TTM is only 0.34%, highlighting low returns on shareholder investments. The Equity Ratio is 77.73%, reflecting a solid capital structure with most assets financed by equity. Despite low profitability, the company maintains a healthy financial position with ample cash reserves.
Cash Flow
60
Neutral
Kulicke & Soffa's cash flow analysis shows a Free Cash Flow Growth Rate of 205.95%, indicating improved cash generation. The Operating Cash Flow to Net Income Ratio is 17.13 for the TTM, suggesting strong cash flow relative to net income. The Free Cash Flow to Net Income Ratio is 13.62, reflecting efficient cash usage. However, fluctuations in operating cash flows and investment cash outflows highlight potential volatility.
Breakdown
Sep 2024Sep 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
706.23M742.49M1.50B1.52B623.18M
Gross Profit
268.75M358.65M748.32M696.99M297.98M
EBIT
-92.50M39.44M470.07M412.45M58.51M
EBITDA
-33.53M89.83M492.71M432.26M78.25M
Net Income Common Stockholders
-69.01M57.15M433.55M367.16M52.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
577.15M759.40M775.54M739.79M530.13M
Total Assets
1.24B1.50B1.59B1.60B1.05B
Total Debt
40.96M48.41M41.69M42.99M24.23M
Net Debt
-186.18M-480.99M-513.84M-319.80M-163.90M
Total Liabilities
296.15M325.22M393.95M506.39M296.57M
Stockholders Equity
944.01M1.17B1.19B1.10B757.99M
Cash FlowFree Cash Flow
14.89M129.00M367.20M277.26M82.69M
Operating Cash Flow
31.04M173.40M390.19M300.03M94.41M
Investing Cash Flow
-138.50M-91.34M133.80M-81.71M-125.96M
Financing Cash Flow
-196.10M-111.88M-321.19M-44.26M-145.81M

Kulicke & Soffa Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price33.22
Price Trends
50DMA
34.01
Negative
100DMA
39.76
Negative
200DMA
41.90
Negative
Market Momentum
MACD
-0.37
Negative
RSI
55.07
Neutral
STOCH
85.33
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLIC, the sentiment is Neutral. The current price of 33.22 is above the 20-day moving average (MA) of 30.66, below the 50-day MA of 34.01, and below the 200-day MA of 41.90, indicating a neutral trend. The MACD of -0.37 indicates Negative momentum. The RSI at 55.07 is Neutral, neither overbought nor oversold. The STOCH value of 85.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KLIC.

Kulicke & Soffa Risk Analysis

Kulicke & Soffa disclosed 34 risk factors in its most recent earnings report. Kulicke & Soffa reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Kulicke & Soffa Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$1.32B16.889.11%3.93%-4.43%57.01%
67
Neutral
$1.68B8.5121.41%-9.97%-17.87%
66
Neutral
$2.33B43.875.74%15.33%-47.04%
60
Neutral
$10.95B10.52-7.07%3.00%7.30%-12.04%
55
Neutral
$776.75M-9.87%-36.86%-351.11%
50
Neutral
$1.77B280.570.31%2.44%-4.92%-85.39%
VSVSH
49
Neutral
$1.86B26.74-1.47%2.92%-13.65%-110.03%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KLIC
Kulicke & Soffa
33.22
-13.38
-28.71%
ACLS
Axcelis Technologies
52.30
-61.13
-53.89%
COHU
Cohu
16.69
-12.23
-42.29%
FORM
Formfactor
30.26
-25.01
-45.25%
HIMX
Himax Technologies
7.69
2.69
53.80%
VSH
Vishay Intertechnology
13.72
-8.89
-39.32%

Kulicke & Soffa Earnings Call Summary

Earnings Call Date:Feb 04, 2025
(Q1-2025)
|
% Change Since: -23.03%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in advanced packaging and thermal compression technologies, along with positive steps in share repurchase programs. However, the company faces challenges in the general semiconductor market due to capacity digestion and global dynamics affecting customer investment decisions. Despite these challenges, there is optimism for growth in the second half of fiscal 2025.
Q1-2025 Updates
Positive Updates
Revenue and Gross Margin
For the December quarter, Kulicke & Soffa delivered $166.1 million in revenue with a strong 52.4% gross margin. This was partially due to revenue recognized for systems shipped in prior periods.
Advanced Packaging and Thermal Compression Progress
The company shipped its latest Flexlex thermal compression system in the new dual-head configuration to a key foundry customer, which provides nearly twice the throughput as the existing system. They anticipate the revenue for TCP in calendar year 2024 to exceed $300 million with a 20% to 25% compound annual growth rate.
Share Repurchase Program
Kulicke & Soffa completed their previous share repurchase program and began a new $300 million repurchase program, reducing shares outstanding by nearly 800,000 shares in the first quarter.
Negative Updates
Capacity Digestion in Semiconductor Market
The general semiconductor market continues to be in a state of capacity digestion with ball bonder revenue sequentially lower from September as expected.
Challenges in Q2 Due to Global Dynamics
Investment decisions by some customers were delayed until after the Chinese New Year due to global political dynamics.
Reduced Revenue Forecast for March Quarter
Kulicke & Soffa expects March quarter revenue of approximately $165 million, plus or minus $10 million, which is lower than the December quarter.
Company Guidance
During the Kulicke & Soffa Q1 2025 earnings call, the company provided guidance and key metrics for the upcoming quarters. They reported $166.1 million in revenue for the December quarter, with a 52.4% gross margin and a non-GAAP EPS of $0.37. The company expects March quarter revenue to be approximately $165 million, plus or minus $10 million, with a gross margin of 47% and a non-GAAP EPS of $0.19. Kulicke & Soffa anticipates a broader cyclical recovery in their core markets, including ball and wedge bonding, driven by improvements in the general semiconductor and automotive sectors. They project the advanced packaging market revenue, including thermal compression bonding (TCP), to grow significantly, aiming for $275 to $300 million in 2025. The company also sees a compound annual growth rate (CAGR) of 20% to 25% for the overall TCP market, with frictionless thermal compression (FTC) expected to grow even faster. They remain focused on expanding their TCP portfolio and securing leadership positions in emerging semiconductor technologies.

Kulicke & Soffa Corporate Events

Business Operations and StrategyFinancial Disclosures
Kulicke & Soffa Ceases EA Equipment Business
Negative
Mar 31, 2025

Kulicke & Soffa announced the cessation of its EA equipment business, which is expected to result in significant financial changes. The company anticipates a reduction in revenue by $25 million to $29 million, a decrease in gross profit by $7 million to $11 million, and a drop in operating expenses by $24 million to $28 million, impacting its long-term financial model.

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.