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MKS (MKSI)
NASDAQ:MKSI

MKS (MKSI) AI Stock Analysis

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MK

MKS

(NASDAQ:MKSI)

Rating:74Outperform
Price Target:
$110.00
▲(5.20%Upside)
MKS Instruments demonstrates strong financial performance and positive technical indicators, contributing to a solid overall score. However, a relatively high P/E ratio and concerns over tariff impacts and industrial market softness slightly temper the outlook.
Positive Factors
Debt Management
Improving free cash flow generation should continue to fund debt paydown, which could help close MKSI’s valuation discount to peers.
Financial Performance
MKS posted stronger-than-expected Q1 results driven by strength in Semi and Electronics & Packaging.
Market Demand
MKS demand commentary remains consistent and positive, which is a key driver of shares.
Negative Factors
Specialty Industrial Segment
There are risks in a sluggish Specialty Industrial recovery, which is down 7% year over year and where core auto and industrial end markets may be adversely impacted by tariffs.
Trade Policy Impact
Potential tariff demand impacts remain unknown, affecting visibility into a material demand recovery.

MKS (MKSI) vs. SPDR S&P 500 ETF (SPY)

MKS Business Overview & Revenue Model

Company DescriptionMKS Instruments, Inc. is a global provider of instruments, systems, subsystems, and process control solutions that measure, control, power, monitor, and analyze critical parameters of advanced manufacturing processes. The company serves a variety of markets, including semiconductor, industrial technologies, life sciences, and research and defense. MKS Instruments offers a wide range of products, including vacuum and analysis products, power solutions, and laser-based systems, catering to the needs of its diverse clientele.
How the Company Makes MoneyMKS Instruments generates revenue through the sale of its broad array of products and services designed to enhance productivity and improve process performance for its customers. Key revenue streams include the sale of precision control systems, such as pressure and flow measurement devices, vacuum technology products, and gas and power solutions. Additionally, the company offers advanced laser systems and photonics solutions used in various applications across industries. MKS Instruments also benefits from service contracts, software solutions, and consumables that complement its product offerings. The company's earnings are significantly influenced by its strategic partnerships and collaborations with leading technology firms and manufacturers, as well as its ability to innovate and adapt to the evolving needs of its markets.

MKS Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 41.11%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented strong financial results and growth in key markets, particularly in semiconductors and electronics packaging. However, there are significant concerns about the impact of tariffs on margins and softness in certain industrial markets. The company is proactive in debt reduction, but geopolitical uncertainties pose challenges.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
First quarter revenue was $936 million, up 8% year-over-year, exceeding the high end of guidance. Gross margins were 47.4% and net earnings per share were $1.71, both at the high end of guidance.
Semiconductor Market Growth
Semiconductor revenue was $413 million, up 3% sequentially and 18% year-over-year. Excluding FX, revenue was up 20% year-over-year.
Electronics and Packaging Success
Revenue from electronics and packaging was $253 million, up 22% year-over-year. Excluding FX and palladium pass-through, sales were up 26%.
Strong Free Cash Flow
First quarter free cash flow was $123 million, over 100% of net earnings and 13% of revenue.
Focus on Debt Reduction
Maintained strong liquidity with $1.3 billion and made a voluntary principal prepayment of $100 million.
Negative Updates
Impact of Tariffs on Margins
Tariffs are expected to impact gross margins by up to 100 basis points, creating uncertainty in the market.
Softness in Specialty Industrial Markets
Revenue in specialty industrial markets was down 13% year-over-year, with continued softness in general industrial and automotive markets.
Pull Forward of Flexible PCB Drilling Equipment Sales
Some sales were pulled forward into Q1, which may result in lower sales in following quarters.
Geopolitical Uncertainty
New and changing trade policies are injecting uncertainty into the industry, impacting customer and supply chain dynamics.
Company Guidance
In the first quarter of fiscal year 2025, MKS Instruments reported strong financial performance, with revenue reaching $936 million and gross margins at 47.4%, both at the high end of the company's guidance. Net earnings per diluted share were $1.71, surpassing the guidance range. The semiconductor segment showed robust growth, with revenue at $413 million, up 18% year-over-year. Electronics and packaging revenue came in at $253 million, also at the high end, driven by strong sales in flexible and rigid PCB equipment. Specialty industrial revenues were $270 million, above the midpoint of guidance, though the automotive market showed some softness. For the second quarter, MKS expects total revenue to be around $925 million, with semiconductor revenue at $415 million and electronics and packaging at $240 million. Anticipated gross margin is 46.5%, with tariff-related costs potentially impacting this by up to 100 basis points. The company maintains a strong balance sheet, with $1.3 billion in liquidity, and plans further debt prepayment in the current quarter, while continuing to manage its operational expenses.

MKS Financial Statement Overview

Summary
MKS Instruments shows solid financial performance with a strong cash flow position and robust equity backing. The income statement indicates good cost management with a healthy gross profit margin and a recovering net profit margin. However, there is room for improvement in operational efficiency as reflected by moderate EBIT and EBITDA margins.
Income Statement
75
Positive
The income statement shows a healthy gross profit margin of 47.5% for TTM, indicating good cost management. The net profit margin is 6.2%, which is a recovery from negative margins in previous years. Revenue growth is stable with a slight increase in TTM compared to the previous year. However, EBIT and EBITDA margins are moderate at 13.7% and 17.9%, respectively, showing room for improvement in operational efficiency.
Balance Sheet
70
Positive
The balance sheet reflects a solid equity position with an equity ratio of 27.5%. The debt-to-equity ratio is low at 0.11 in TTM, suggesting manageable leverage levels. Return on equity is moderate at 9.6%, indicating fair profitability. Overall, the balance sheet shows a stable financial position with adequate equity backing.
Cash Flow
80
Positive
Cash flow analysis highlights a strong operating cash flow to net income ratio of 2.65, indicating excellent cash generation relative to profits. Free cash flow growth is robust with a 18% increase in TTM. The free cash flow to net income ratio stands at 2.13, showcasing strong cash conversion capabilities. Overall, the cash flow position is solid with strong cash generation and growth.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.65B3.59B3.62B3.55B2.95B2.33B
Gross Profit1.74B1.71B1.64B1.55B1.38B1.05B
EBITDA655.00M873.00M-1.18B826.00M794.00M551.30M
Net Income227.00M190.00M-1.84B333.00M551.00M350.00M
Balance Sheet
Total Assets8.56B8.59B9.12B11.49B4.54B3.90B
Cash, Cash Equivalents and Short-Term Investments655.00M714.00M875.00M910.00M1.04B836.00M
Total Debt261.00M4.78B5.02B5.17B1.03B1.03B
Total Liabilities6.20B6.27B6.65B7.01B1.65B1.54B
Stockholders Equity2.35B2.32B2.47B4.48B2.89B2.36B
Cash Flow
Free Cash Flow484.00M410.00M232.00M365.00M552.80M428.30M
Operating Cash Flow602.00M528.00M319.00M529.00M639.50M513.20M
Investing Cash Flow-117.00M-117.00M-84.00M-4.55B-204.60M-202.40M
Financing Cash Flow-657.00M-549.00M-259.00M3.97B-65.00M-121.50M

MKS Technical Analysis

Technical Analysis Sentiment
Positive
Last Price104.56
Price Trends
50DMA
86.94
Positive
100DMA
85.66
Positive
200DMA
97.22
Positive
Market Momentum
MACD
4.59
Negative
RSI
71.76
Negative
STOCH
93.77
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKSI, the sentiment is Positive. The current price of 104.56 is above the 20-day moving average (MA) of 95.26, above the 50-day MA of 86.94, and above the 200-day MA of 97.22, indicating a bullish trend. The MACD of 4.59 indicates Negative momentum. The RSI at 71.76 is Negative, neither overbought nor oversold. The STOCH value of 93.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MKSI.

MKS Risk Analysis

MKS disclosed 31 risk factors in its most recent earnings report. MKS 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 Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VNVNT
75
Outperform
$5.69B15.6635.88%0.26%-3.59%-11.30%
74
Outperform
$7.01B31.169.50%0.84%-1.14%
74
Outperform
$6.19B24.7417.73%7.10%58.52%
72
Outperform
$5.84B54.854.39%1.18%-3.43%-50.48%
71
Outperform
$4.80B68.219.73%6.52%1.60%
68
Neutral
$5.46B47.568.02%0.98%8.56%18.99%
63
Neutral
$34.04B6.14-11.52%1.82%5.53%-18.79%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MKSI
MKS
104.56
-30.35
-22.50%
CGNX
Cognex
32.52
-14.36
-30.63%
NOVT
Novanta
133.33
-26.91
-16.79%
ITRI
Itron
135.69
36.90
37.35%
LFUS
Littelfuse
236.49
-13.39
-5.36%
VNT
Vontier
38.44
0.39
1.02%

MKS Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
MKS Instruments Announces Executive Changes and Name Update
Neutral
May 15, 2025

On May 12, 2025, MKS Instruments announced key executive appointments effective August 1, 2025, with James A. Schreiner becoming Executive Vice President and Chief Operating Officer and David P. Henry taking on the role of Executive Vice President, Global Strategic Marketing and General Manager, Materials Solutions Division. These appointments are accompanied by salary increases and stock unit awards for the executives. Additionally, at the 2025 Annual Meeting, shareholders approved amendments to the company’s Restated Articles of Organization and By-Laws to lower voting requirements and change the company’s name to MKS Inc., effective May 16, 2025. This change reflects the company’s expanded market presence and capabilities.

The most recent analyst rating on (MKSI) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on MKS Instruments stock, see the MKSI Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 25, 2025