Semiconductor equipment supplier Photronics is betting on China's domestic chip manufacturing ambitions to drive future growth. PLAB stock recently broke out.
In a presentation at the Stifel Cross Sector Insight Conference, which ran June 7-9, Photronics said it wants to win the "lion's share" of the photomask business from the "Made in China 2025" plan.
Photronics is already the world's largest merchant photomask manufacturer. Photomasks are high-precision quartz plates that contain microscopic images of electronic circuits. They are used to make integrated circuits and flat-panel displays.
For fiscal 2024, Photronics expects to earn $2.50 to $2.55 a share on sales of $950 million. That's based on the midrange of its target model presented at the Stifel conference.
In fiscal 2021, it earned 89 cents a share, up 71% from the prior year, on sales of $664 million, up 9%. It is now midway through its fiscal 2022.
PLAB Stock Breaks Out
Early on May 25, the Brookfield, Conn.-based company delivered a beat-and-raise earnings report. Photronics earned 49 cents a share, up 188% year over year, on sales of $204.5 million, up 28%, for its fiscal second quarter ended May 1.
"We're on track to deliver the best year in the company's history with strong end-market demand, strategic capacity expansions, higher profitability, and a strong balance sheet to support further growth initiatives," Chief Financial Officer John Jordan said on a conference call with analysts.
PLAB stock jumped 18.8% on the news. The next day, PLAB stock broke out of a 12-week consolidation pattern at a buy point of 20.40, according to IBD MarketSmith charts.
On the stock market today, PLAB stock fell 1.9% to 21.25 amid a broad market sell-off.
PLAB Stock Ranks No. 1 In Group
PLAB stock ranks first out of 31 stocks in IBD's semiconductor equipment industry group, according to IBD Stock Checkup. It has a best-possible IBD Composite Rating of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
