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MKS Instruments (MKSI)
NASDAQ:MKSI
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MKS Instruments
(NASDAQ:MKSI)65Neutral
Positive Factors
Debt Management
The company made progress on debt reduction during the quarter, with a $100M prepayment resulting in ~$15M in annualized savings to interest expense.
Financial Performance
MKS Instruments posted upside results driven by Semiconductor and Electronics and Packaging sales.
Negative Factors
Market Concerns
Ongoing uncertainty about the strength of WFE in 2025 and macro concerns overhanging parts of MKS’ Specialty Industrial business overshadowed a strong Q4 showing.
MKS Instruments (MKSI) vs. S&P 500 (SPY)
Market Cap
$5.76B
Dividend Yield1.03%
Average Volume (3M)1.05M
Price to Earnings (P/E)30.4
Beta (1Y)2.39
Revenue Growth-0.99%
EPS GrowthN/A
CountryUS
Employees10,200
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)2.81
Shares Outstanding67,377,590
10 Day Avg. Volume1,244,309
30 Day Avg. Volume1,050,357
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.61
Price to Cash Flow (P/CF)8.20
P/FCF Ratio8.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$135.08Price Target Upside57.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
MKS Instruments Business Overview & Revenue Model
Company DescriptionMKS Instruments, Inc. is a global provider of instruments, subsystems, and process control solutions that measure, control, power, and monitor critical parameters of advanced manufacturing processes. The company serves a wide range of industries, including semiconductor, industrial technologies, life and health sciences, and research and defense. MKS Instruments offers a variety of products such as vacuum and analysis solutions, power solutions, and photonics solutions, which are essential for the development and production of advanced technologies.
How the Company Makes MoneyMKS Instruments generates revenue primarily through the sale of its products and services to a diverse set of industries. The semiconductor market is a significant revenue stream, where MKS provides critical components and systems required for the manufacturing of semiconductor devices. Additionally, the company earns revenue from the industrial technologies sector by supplying solutions for industrial manufacturing, energy generation, and environmental monitoring. The life and health sciences sector also contributes to the company's earnings through the provision of products used in biotech and medical research. MKS Instruments may also have strategic partnerships that enhance its market reach and technology offerings, although specific partnership details are not available.
MKS Instruments Financial Statement Overview
Summary
MKS Instruments exhibits a solid financial foundation with strengths in revenue growth and cash flow generation. Despite a challenging 2023 with operational losses, the company has shown recovery in 2024 through improved profitability metrics and debt reduction. The balance sheet remains strong, with healthy liquidity and a favorable debt profile, positioning the company well for future growth in the Hardware & Equipment industry.Income Statement
MKS Instruments has demonstrated consistent revenue growth from 2019 through 2024, albeit with fluctuations. The gross profit margin improved from 43.7% in 2019 to 47.6% in 2024, indicating enhanced cost management. However, the net profit margin faced significant challenges, particularly in 2023 with a substantial net loss, impacting the overall profitability. EBIT and EBITDA margins were also volatile, reflecting operational challenges.65
Positive
Balance Sheet
The company's balance sheet shows resilience with a significant reduction in total debt from 2023 to 2024, resulting in a favorable debt-to-equity ratio decrease from 2.03 to 0.11. The equity ratio has shown stability, indicating a strong asset base. Return on equity was negative in 2023 due to losses but improved in 2024, highlighting recovery efforts. The company maintains a healthy cash position, supporting its financial stability.72
Positive
Cash Flow
MKS Instruments has maintained a strong cash flow position, with operating cash flow showing a positive trend. The free cash flow growth rate is robust, reflecting effective capital expenditure management. Operating and free cash flow to net income ratios were impacted by 2023 losses but improved in 2024, indicating better cash conversion efficiency.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.01B | 3.59B | 3.62B | 3.55B | 2.95B | 2.33B | Gross Profit |
| 1.37B | 1.71B | 1.64B | 1.55B | 1.38B | 1.05B | EBIT |
| 693.10M | 498.00M | -1.55B | 617.00M | 698.90M | 453.80M | EBITDA |
| 808.90M | 870.00M | -1.18B | 888.00M | 795.00M | 551.30M | Net Income Common Stockholders |
| 555.20M | 190.00M | -1.84B | 333.00M | 551.00M | 350.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 714.00M | 714.00M | 875.00M | 910.00M | 1.04B | 836.00M | Total Assets |
| 8.59B | 8.59B | 9.12B | 11.49B | 4.54B | 3.90B | Total Debt |
| 261.00M | 261.00M | 5.02B | 5.17B | 1.03B | 1.03B | Net Debt |
| -453.00M | -453.00M | 4.15B | 4.26B | 61.20M | 419.10M | Total Liabilities |
| 6.27B | 6.27B | 6.65B | 7.01B | 1.65B | 1.54B | Stockholders Equity |
| 2.32B | 2.32B | 2.47B | 4.48B | 2.89B | 2.36B |
| Cash Flow | Free Cash Flow | ||||
| 366.50M | 410.00M | 232.00M | 365.00M | 552.80M | 428.30M | Operating Cash Flow |
| 493.40M | 528.00M | 319.00M | 529.00M | 639.50M | 513.20M | Investing Cash Flow |
| -105.70M | -117.00M | -84.00M | -4.55B | -204.60M | -202.40M | Financing Cash Flow |
| -55.00M | -549.00M | -259.00M | 3.97B | -65.00M | -121.50M |
MKS Instruments Technical Analysis
Negative
85.53
Price Trends
107.42
Negative
107.87
Negative
114.49
Negative
Market Momentum
-5.93
Positive
24.78
Positive
7.75
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKSI, the sentiment is Negative. The current price of 85.53 is below the 20-day moving average (MA) of 102.72, below the 50-day MA of 107.42, and below the 200-day MA of 114.49, indicating a bearish trend. The MACD of -5.93 indicates Positive momentum. The RSI at 24.78 is Positive, neither overbought nor oversold. The STOCH value of 7.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MKSI.
MKS Instruments Risk Analysis
MKS Instruments disclosed 33 risk factors in its most recent earnings report. MKS Instruments 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
MKS Instruments Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $98.12B | 23.23 | 48.75% | 1.13% | 13.21% | 27.25% | |
77 Outperform | $271.75B | 34.01 | 40.98% | 0.82% | 2.53% | -3.33% | |
76 Outperform | $124.20B | 20.00 | 34.06% | 1.05% | 4.45% | -10.01% | |
70 Outperform | $17.34B | 32.29 | 14.62% | 0.45% | 5.52% | 16.59% | |
69 Neutral | $92.89B | 29.40 | 89.51% | 0.91% | 12.19% | 20.80% | |
65 Neutral | $5.76B | 30.43 | 8.18% | 1.03% | -0.99% | ― | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
MKSI
MKS Instruments
85.53
-37.71
-30.60%
AMAT
Applied Materials
152.87
-52.79
-25.67%
ASML
ASML Holding
708.22
-253.74
-26.38%
KLAC
KLA
699.00
-0.62
-0.09%
LRCX
Lam Research
76.44
-18.90
-19.82%
TER
Teradyne
107.23
3.88
3.75%
MKS Instruments Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -22.92% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
MKS Instruments demonstrated strong financial performance with significant margin expansion and strategic debt management. Despite challenges in the NAND market and a decline in the specialty industrial segment, the company showed resilience and growth in key areas, such as the semiconductor and electronics markets. The recognition by industry leaders further underscores the company's strong position. The overall sentiment is positive, with highlights outweighing the lowlights.Highlights
Strong Financial Performance
Despite flat year-over-year revenue of $3.6 billion, MKS Instruments achieved a 190 basis point expansion in gross margin, increased earnings per share by 49%, and improved free cash flow by $178 million.
Debt Management and Interest Expense Reduction
The company executed an upsized $1.4 billion convertible note offering and made voluntary prepayments of $426 million on its term loan facility. These actions, along with a slight improvement in the interest rate environment, reduced the annual interest expense run-rate by over $130 million.
Growth in Semiconductor and Electronics Markets
In Q4, revenue grew 5% year-over-year, driven by double-digit growth in electronics and packaging and semiconductor end markets. Semiconductor revenue increased 6% sequentially, mainly due to DRAM and logic foundry demand.
Recognition in Industry
MKS was named to U.S. News & World Report’s Best Companies to Work For in its industry and recognized by Newsweek and Statista as one of America’s most responsible companies for 2025.
Lowlights
NAND Market Challenges
The NAND market remains at historically low levels. Although there are signs of inventory burn-off, the market is still off from previous high levels.
Decline in Specialty Industrial Market
Revenues in the specialty industrial market decreased 2% sequentially and were down 8% year-over-year, primarily due to softness in the broader industrial market.
Seasonal Revenue Decline Expected
For Q1, a 4% sequential revenue decline is expected in the electronics and packaging market due to seasonality associated with the Lunar New Year.
Company Guidance
In the MKS Instruments' Fourth Quarter 2024 Earnings Conference Call, the company reported several positive financial metrics despite a challenging market environment. The fiscal year concluded with a flat year-over-year revenue of $3.6 billion. However, MKS achieved a 190 basis point increase in gross margin, while earnings per share rose by 49%. Free cash flow improved by $178 million, and the company reduced its annual interest expense run-rate by over $130 million through strategic debt management, including a $1.4 billion convertible note offering and voluntary prepayments on term loans. In terms of end markets, semiconductor revenue increased 6% sequentially, with electronics and packaging up 10% sequentially. The company remains confident entering 2025, projecting stable revenue in its semiconductor market to be flattish, and has outlined investments in growth opportunities, particularly in advanced packaging and world-class optics. For the first quarter of 2025, MKS expects revenue of $910 million, with gross margins of 46.5% and operating expenses ranging between $250 million and $260 million, reflecting investments in long-term growth.MKS Instruments Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
MKS Instruments Enhances Financial Position with Loan Repricing
Positive
Jan 24, 2025
On January 24, 2025, MKS Instruments announced the successful repricing of its $2.5 billion USD and €596 million EUR secured tranche B term loans maturing in 2029, resulting in reduced interest rates and a voluntary prepayment of $100 million, lowering the USD tranche B principal to $2.5 billion. This repricing is expected to generate approximately $15 million in annualized cash interest savings, indicating the company’s ongoing efforts to deleverage its balance sheet and enhance free cash flow. The move underscores MKS Instruments’ strategic initiatives to cut costs and optimize financial operations, enhancing its market positioning and stakeholder value.
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.