Kulicke & Soffa (KLIC) AI Stock Analysis

Compare

634 Followers

Top Page

Kulicke & Soffa

(NASDAQ:KLIC)

Rating:64Neutral

Price Target:

$37.00

▲( 15.99% Upside)

Kulicke & Soffa is navigating a challenging environment with mixed financial performance. Strong balance sheet and cash management provide stability, but declining revenues and profitability pose risks. Technical analysis indicates potential short-term stability, but valuation concerns suggest caution. The earnings call underscores both growth potential and significant challenges, particularly with the discontinuation of the EA business. Investors should be aware of these dynamics when considering the stock.

Positive Factors

Product Innovation

There is enthusiasm about Kulicke & Soffa's TCB opportunity as TSMC tests it for AI applications.

Revenue Forecast

Sales expected to grow at least 20% over the first half of the fiscal year in the second half.

Revenue Growth

Fluxless Thermo-Compression traction is progressing well, with management expecting significant revenue growth as the solution is adopted by leading edge customers.

Negative Factors

Demand

The decline in auto and industrial demand, especially in Southeast Asia, is impacting the company's performance.

Earnings

Kulicke & Soffa reported results that missed guidance and projected a weaker outlook.

Market Competition

The Thermo-Compression Bonders market for High Bandwidth Memory appears crowded with many existing suppliers.

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

Market Cap

$1.68B

Dividend Yield2.54%

Average Volume (3M)662.50K

Price to Earnings (P/E)88.2

Beta (1Y)1.48

Revenue Growth-6.17%

EPS GrowthN/A

CountryUS

Employees2,677

SectorTechnology

Sector Strength78

IndustrySemiconductors

Share Statistics

EPS (TTM)-0.52

Shares Outstanding52,769,350

10 Day Avg. Volume549,868

30 Day Avg. Volume662,504

Financial Highlights & Ratios

PEG Ratio4.63

Price to Book (P/B)1.76

Price to Sales (P/S)0.00

P/FCF Ratio48.07

Enterprise Value/Market Cap0.87

Enterprise Value/Revenue0.51

Enterprise Value/Gross Profit4.39

Enterprise Value/Ebitda-18.06

Forecast

1Y Price Target

$40.00

Price Target Upside25.39% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

Kulicke & Soffa Business Overview & Revenue Model

Company DescriptionKulicke & Soffa Industries, Inc. (KLIC) is a leading provider of semiconductor, LED, and electronic assembly solutions serving the global automotive, consumer, communications, computing, and industrial markets. The company designs and manufactures advanced equipment used in the production of semiconductors, including wire bonding, wedge bonding, and die bonding machines, as well as advanced packaging and electronics assembly solutions. Kulicke & Soffa is headquartered in Singapore and operates globally, catering to a diverse set of clients in the electronics manufacturing industry.

How the Company Makes MoneyKulicke & Soffa generates revenue primarily through the sale of its semiconductor assembly equipment and tools. The company's key revenue streams include the sale of wire bonding and wedge bonding machines, which are crucial in the semiconductor manufacturing process. Additionally, Kulicke & Soffa provides advanced packaging solutions and electronic assembly products, further diversifying its revenue base. The company also offers aftermarket services, including spare parts and equipment maintenance, which contribute to its recurring revenue. Strategic partnerships and collaborations with leading semiconductor manufacturers enable Kulicke & Soffa to maintain a competitive edge and drive sales growth in the rapidly evolving electronics industry.

Kulicke & Soffa Financial Statement Overview

Summary

Kulicke & Soffa is facing financial difficulties, with declining revenue and profitability. Despite this, the company exhibits a strong balance sheet with low leverage and a solid equity base. Cash flow metrics show resilience, indicating potential for recovery if revenue stabilizes and operational efficiency improves.

Income Statement

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

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

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.

TTM	Sep 2024	Sep 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
701.17M	706.23M	742.49M	1.50B	1.52B	623.18M
	Gross Profit
331.95M	268.75M	358.65M	748.32M	696.99M	297.98M
	EBIT
39.90M	-92.50M	39.44M	470.07M	412.45M	58.51M
	EBITDA
36.90M	-33.53M	89.83M	492.71M	432.26M	78.25M
	Net Income Common Stockholders
3.34M	-69.01M	57.15M	433.55M	367.16M	52.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
634.75M	577.15M	759.40M	775.54M	739.79M	530.13M
	Total Assets
1.30B	1.24B	1.50B	1.59B	1.60B	1.05B
	Total Debt
41.33M	40.96M	48.41M	41.69M	42.99M	24.23M
	Net Debt
-318.42M	-186.18M	-480.99M	-513.84M	-319.80M	-163.90M
	Total Liabilities
286.53M	296.15M	325.22M	393.95M	506.39M	296.57M
	Stockholders Equity
1.01B	944.01M	1.17B	1.19B	1.10B	757.99M
Cash Flow		Free Cash Flow
35.35M	14.89M	129.00M	367.20M	277.26M	82.69M
	Operating Cash Flow
57.27M	31.04M	173.40M	390.19M	300.03M	94.41M
	Investing Cash Flow
4.08M	-138.50M	-91.34M	133.80M	-81.71M	-125.96M
	Financing Cash Flow
-206.43M	-196.10M	-111.88M	-321.19M	-44.26M	-145.81M

Kulicke & Soffa Technical Analysis

Technical Analysis Sentiment

Negative

Last Price31.90

Price Trends

50DMA

32.58

Negative

100DMA

37.45

Negative

200DMA

40.95

Negative

Market Momentum

MACD

0.09

Positive

RSI

45.13

Neutral

STOCH

19.09

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLIC, the sentiment is Negative. The current price of 31.9 is below the 20-day moving average (MA) of 32.77, below the 50-day MA of 32.58, and below the 200-day MA of 40.95, indicating a bearish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 45.13 is Neutral, neither overbought nor oversold. The STOCH value of 19.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACLS	77 Outperform	$1.87B	10.68	18.45%	―	-15.14%	-28.30%
HIMX	70 Neutral	$1.44B	16.38	9.79%	3.41%	0.61%	80.97%
FORM	68 Neutral	$2.34B	43.89	5.74%	―	15.33%	-47.04%
KLIC	64 Neutral	$1.68B	88.24	2.29%	2.54%	-6.17%	―
Sector *	61 Neutral	$11.28B	10.16	-6.88%	2.97%	7.41%	-8.93%
COHU	58 Neutral	$788.69M	―	-9.87%	―	-30.75%	-3668.44%
VSH	55 Neutral	$1.89B	26.74	-3.14%	2.88%	-11.31%	-127.88%

* Technology Sector Average

Performance Comparison

KLIC

Kulicke & Soffa

31.90

-14.00

-30.50%

ACLS

Axcelis Technologies

58.32

-57.01

-49.43%

COHU

Cohu

16.96

-14.76

-46.53%

FORM

Formfactor

30.37

-28.33

-48.26%

HIMX

Himax Technologies

8.21

2.02

32.63%

VSH

Vishay Intertechnology

13.91

-9.41

-40.35%

Kulicke & Soffa Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q2-2025)

% Change Since: 0.50%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a company in transition, with strong product launches and growth in key technology areas such as Thermo-Compression and Vertical Wire. However, significant challenges remain due to the discontinuation of the Electronics Assembly business, impacting financial performance, and macroeconomic uncertainties affecting order activity in key regions.

Q2-2025 Updates

Positive Updates

Launch of ATPremier MEM Plus

Kulicke & Soffa announced the launch of the ATPremier MEM Plus, a new Wafer-Level-Packaging solution optimized for stacked DRAM opportunities, indicating strong potential for future growth in memory packaging.

Advanced Dispense Portfolio Growth

The company received an order from a high-volume U.S.-based integrated device manufacturer and is seeing strong performance in its solid-state battery opportunity, indicating potential for growth in this segment.

Thermo-Compression and Vertical Wire Opportunities

Kulicke & Soffa is well positioned to capture opportunities in Thermo-Compression and Vertical Wire technologies, which are becoming incumbent technologies for high-performance applications.

Strong Customer Engagement

The company has nearly 120 systems installed across 10 different highly-engaged customers, demonstrating strong customer relationships and market penetration.

New Product Launches in Power Semiconductor

Launched a new Sonotrode-enabled pin welding system for power semiconductor applications, extending market reach in response to growing demand for electric vehicles and sustainable energy.

Negative Updates

Discontinuation of Electronics Assembly Business

Kulicke & Soffa intends to discontinue its Electronics Assembly equipment business, resulting in $86.6 million in related charges for inventory write-down, supply chain, asset impairment, and restructuring.

Revenue and Gross Margin Decline

The company reported revenue of $162 million and gross margins of 24.9%, both negatively impacted by the EA related inventory and supply chain charges of $38.6 million.

Sequential Order Activity Down in Southeast Asia

Sequential order activity decreased in Southeast Asia, primarily affecting the Automotive and Industrial market, due to macroeconomic uncertainty and trade tensions.

High Utilization Rates Without Capacity Buys

Despite high utilization rates in China and Taiwan, there is hesitation in capacity buys due to tariff uncertainties, affecting potential revenue growth.

Company Guidance

During the Kulicke & Soffa fiscal second-quarter 2025 earnings call, the company provided several key metrics and guidance. They reported a revenue of $162 million for the March quarter, with gross margins at 24.9%, impacted by $38.6 million in inventory and supply chain charges related to the wind-down of their EA equipment business. Operating expenses were $125.1 million, which included restructuring and impairment charges totaling $48.6 million, resulting in an adjusted operating expense of $76.5 million. The company announced a revenue outlook for the June quarter of $145 million, plus or minus $10 million, with expected gross margins of 46.5%. Non-GAAP operating expenses are anticipated to be $68 million, with a GAAP EPS loss of $0.09 and a non-GAAP EPS gain of $0.05 per share. Additionally, the company completed a share repurchase program, buying over 500,000 shares for $21.3 million. The call highlighted the impact of macroeconomic uncertainties and trade dynamics on their market outlook, with particular emphasis on hesitations in Southeast Asia's automotive and industrial sectors. However, they noted utilization improvements in Taiwan and China, which could potentially lead to capacity additions as conditions stabilize.

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.