Veeco (VECO) AI Stock Analysis

• Market Cap: $2.06B
• Dividend Yield: N/A
• Average Volume (3M): 571.71K
• Price to Earnings (P/E): 39.8
• Beta (1Y): 1.74
• Revenue Growth: -3.90%
• EPS Growth: -41.66%
• Country: US
• Employees: 1,231
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.36
• Shares Outstanding: 60,297,090
• 10 Day Avg. Volume: 597,420
• 30 Day Avg. Volume: 571,712
• PEG Ratio: -0.06
• Price to Book (P/B): 1.96
• Price to Sales (P/S): 2.11
• P/FCF Ratio: 33.09
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 2.56
• Enterprise Value/Gross Profit: 6.28
• Enterprise Value/Ebitda: 23.44
• 1Y Price Target: $34.67
• Price Target Upside: 5.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.58
• Revenue Forecast (FY): $727.29M

• Rating: 70 Neutral
• Price Target: $35.00 ▲(6.16% Upside)

Veeco's overall stock score is driven by strong technical analysis and positive earnings call outcomes, despite challenges in financial performance and valuation. The pending merger with Axcelis Technologies provides a strategic growth opportunity, but high valuation metrics and cash flow concerns temper the outlook.

Positive Factors

Strategic Merger

The merger with Axcelis Technologies is set to create a leading semiconductor equipment company, expanding the addressable market and enhancing R&D capabilities, which could significantly strengthen Veeco's market position and competitive advantage.

Advanced Packaging Growth

Increasing orders for advanced packaging systems highlight Veeco's ability to capitalize on the growing demand in AI and high-performance computing, supporting long-term revenue growth and market expansion.

DRAM Market Expansion

The selection of Veeco's technology for evaluation in DRAM R&D signifies potential penetration into the DRAM market, which could lead to high-volume manufacturing opportunities and long-term revenue growth.

Negative Factors

Revenue Decline

A decline in revenue growth indicates potential challenges in maintaining market share and competitive positioning, which could impact long-term financial performance and strategic initiatives.

Gross Margin Pressure

Expected decline in gross margins due to product mix changes could pressure profitability, affecting Veeco's ability to sustain healthy profit margins over the long term.

Cash Flow Challenges

Significant decline in free cash flow growth suggests cash generation issues, which may limit Veeco's ability to invest in growth opportunities and manage financial obligations effectively.

Veeco Business Overview & Revenue Model

Company Description

Veeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor and thin film process equipment primarily to make electronic devices worldwide. The company offers laser annealing, ion beam deposition and etch, metal organic chemical vapor deposition, single wafer wet processing and surface preparation, molecular beam epitaxy, and atomic layer deposition and other deposition systems, as well as packaging lithography equipment. Its process equipment systems are used in the production of a range of microelectronic components, including logic, dynamic random-access memory, photonics devices, power electronics, radio frequency filters and amplifiers, magnetic heads for hard disk drives, and other semiconductor devices. In addition, the company markets and sells its products to integrated device manufacturers and foundries; outsourced semiconductor assembly and test, hard disk drive, and photonics manufacturers; and research centers and universities. Veeco Instruments Inc. was founded in 1945 and is headquartered in Plainview, New York.

How the Company Makes Money

Veeco generates revenue primarily through the sale of its specialized manufacturing equipment and systems, which are used by companies in the semiconductor and related industries. Key revenue streams include the sale of new equipment, spare parts, and service contracts for maintenance and support. Additionally, the company benefits from long-term relationships with major technology firms, which can lead to repeat business and the development of customized solutions. The growing demand for advanced materials in emerging technology sectors, such as 5G and electric vehicles, also contributes to Veeco's earnings potential.

Veeco Financial Statement Overview

Summary

Veeco's financial performance shows a mix of strengths and weaknesses. The company maintains healthy profit margins, but recent declines in revenue growth and profitability metrics suggest potential challenges. The balance sheet is stable with improved leverage, but cash flow metrics indicate areas of concern.

Income Statement

Veeco's income statement shows a mixed performance. The company has maintained a healthy gross profit margin of 41.5% TTM, but the net profit margin has decreased to 8.7% TTM from 10.3% in the previous year. Revenue growth has turned negative at -2.7% TTM, indicating a potential slowdown. The EBIT and EBITDA margins have also declined slightly, suggesting pressure on operating efficiency.

Balance Sheet

The balance sheet reflects moderate financial stability. The debt-to-equity ratio has improved to 0.31 TTM, indicating reduced leverage compared to previous years. Return on equity has decreased to 7.6% TTM, showing a decline in profitability. The equity ratio remains stable, suggesting a balanced capital structure.

Cash Flow

Cash flow analysis reveals some challenges. Free cash flow growth is negative at -120.3% TTM, indicating a significant decline. The operating cash flow to net income ratio is 0.48 TTM, reflecting moderate cash generation relative to earnings. The free cash flow to net income ratio is 0.74 TTM, showing a reasonable conversion of earnings to cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	681.41M	717.30M	666.43M	646.14M	583.28M	454.16M
Gross Profit	278.11M	304.00M	285.06M	263.15M	242.27M	194.30M
EBITDA	74.56M	105.02M	8.40M	88.14M	82.77M	46.97M
Net Income	49.24M	73.71M	-30.37M	166.94M	26.04M	-8.39M
Balance Sheet
Total Assets	1.29B	1.25B	1.23B	1.13B	898.98M	898.06M
Cash, Cash Equivalents and Short-Term Investments	369.35M	344.31M	305.44M	302.41M	223.93M	319.40M
Total Debt	262.43M	314.27M	310.50M	311.57M	266.71M	331.57M
Total Liabilities	413.94M	480.81M	556.60M	550.36M	461.35M	489.69M
Stockholders Equity	875.97M	770.77M	672.44M	577.82M	437.63M	408.37M
Cash Flow
Free Cash Flow	54.84M	45.70M	33.74M	83.88M	27.10M	36.22M
Operating Cash Flow	72.95M	63.81M	61.67M	108.48M	67.74M	43.02M
Investing Cash Flow	-33.78M	-64.55M	-53.33M	-68.88M	44.53M	-71.79M
Financing Cash Flow	-9.42M	-12.58M	-4.68M	-4.55M	-122.03M	29.10M

Veeco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 32.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VECO, the sentiment is Positive. The current price of 32.97 is above the 20-day moving average (MA) of 31.16, above the 50-day MA of 30.37, and above the 200-day MA of 24.93, indicating a bullish trend. The MACD of 1.01 indicates Negative momentum. The RSI at 57.97 is Neutral, neither overbought nor oversold. The STOCH value of 60.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VECO.

Veeco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLAB	74 Outperform	$2.02B	15.08	11.89%	―	-2.04%	8.84%
VECO	70 Neutral	$2.06B	39.77	6.12%	―	-3.90%	-41.66%
HIMX	69 Neutral	$1.47B	23.40	7.17%	4.48%	-3.62%	-20.33%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MXL	60 Neutral	$1.68B	-9.21	-35.16%	―	7.53%	22.97%
LASR	59 Neutral	$2.23B	-49.48	-19.18%	―	12.05%	14.24%
NVTS	48 Neutral	$2.30B	-17.06	-33.25%	―	-38.06%	-50.14%