One-glance verdict
Overvalued
$7.78 our estimate vs market $64.30
Wall Street consensus: $91.60 (1,076.7% higher than our fair-value estimate)
726% above our estimate, beyond the bull case
Fundamentals snapshot
AXT, Inc.
AXTI · NMS · Technology · Semiconductor Equipment & Materials
Current price
$64.30
52-week range
$3.93 - $143.16
Market cap
$4.22B
Balance sheet
Healthy
-16.40x Concerning
Net cash $315.67M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 42.1% last year.
- Reward Returns 1.0% on equity, ahead of 20% of its peers.
- Reward Free cash flow was positive in 1/10 years.
- Risk Stock trades 18005.8% above its 5-year average P/E.
What this company does
AXT, Inc.
AXT makes special materials called semiconductor substrates, which act as the foundational layer for building high-tech components like computer chips and lasers. The company's revenue comes from selling these advanced materials to other companies that build parts for 5G networks, data centers, and 3D sensors for things like facial recognition. Because AXT's products are a critical piece of the supply chain (the network of companies that create and distribute a final product) for many growing tech industries, its success is linked to the demand for these new technologies.
How the company got here
AXT was founded in 1986 by a scientist who saw that certain special materials would be needed for future technologies. The company focused on developing a unique method for growing crystals, called the Vertical Gradient Freeze (VGF) technique, which gives their products special advantages. They went public on the Nasdaq stock exchange in 1998 and have since established significant manufacturing operations in China. A key part of their strategy has been to gain control over their raw materials by participating in joint ventures, which are business arrangements where two or more parties agree to pool their resources for a specific task.
What it actually does
AXT is a materials science company that creates the fundamental building blocks for high-tech electronics. Think of them as making the super-pure, perfectly structured circular platters, called substrates or wafers, on which other companies build tiny electronic components like lasers and sensors. These aren't made of the common silicon you find in most computer chips, but of special materials that can do things silicon can't, like creating and detecting light efficiently. Their products are essential for things like high-speed internet in data centers, 5G wireless signals, facial recognition sensors in your phone, and solar panels on satellites.
Substrates
This is the company's main business, making up the majority of its sales. AXT produces three main types of these special wafers: Indium Phosphide (InP), Gallium Arsenide (GaAs), and Germanium (Ge). Companies that make components for data centers, 5G networks, and AI hardware buy these wafers because they are the necessary foundation for building the lasers and sensors that power that technology. The demand for Indium Phosphide, in particular, is growing rapidly because it is critical for the super-fast optical connections needed to make AI work on a large scale.
Raw Materials and Other
This is a smaller but strategically important part of the company. Through its partnerships, AXT produces and sells the high-purity raw materials needed to make its own substrates, such as purified gallium and arsenic. They also sell these materials to other companies in the industry. This gives AXT more control over its supply chain (the entire process of making and selling goods, from getting the raw materials to delivering the final product), which helps stabilize costs and ensure they have the materials they need.
What management is betting on now
The company is heavily focused on the massive growth in artificial intelligence and the data centers that power it. Management believes the need for faster data transfer using light, rather than copper wires, creates a huge, multi-year opportunity for its Indium Phosphide (InP) wafers. To meet this expected demand, they are significantly increasing their manufacturing capacity (the maximum amount they can produce). They are also highlighting their unique position of having a deeply integrated supply chain in China, which they believe gives them an advantage in sourcing the critical raw materials needed for production.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-6.36M
FY2024 Q4
$1.10M
FY2025 Q1
$-3.86M
FY2025 Q2
$-4.86M
FY2025 Q3
$-11.33M
FY2025 Q4
$1.26M
FY2026 Q1
$-13.06M
FY2026 Q2
$3.56M
Revenue
$47.59M
Net income
$11.13M
Diluted EPS
0.17
Operating cash flow
$10.78M
Free cash flow
$3.56M
Fetching…
Sources
Revenue
$26.92M
Net income
$-1.62M
Diluted EPS
-0.03
Operating cash flow
$-11.68M
Free cash flow
$-13.06M
Fetching…
Sources
Revenue
$23.04M
Net income
$-3.55M
Diluted EPS
-0.09
Operating cash flow
$4.29M
Free cash flow
$1.26M
Fetching…
Sources
Revenue
$27.95M
Net income
$-1.91M
Diluted EPS
-0.04
Operating cash flow
$-9.15M
Free cash flow
$-11.33M
Fetching…
Sources
Revenue
$17.97M
Net income
$-7.01M
Diluted EPS
-0.16
Operating cash flow
$-4.58M
Free cash flow
$-4.86M
Fetching…
Sources
Revenue
$19.36M
Net income
$-8.80M
Diluted EPS
-0.20
Operating cash flow
$-3.35M
Free cash flow
$-3.86M
Fetching…
Sources
Revenue
$25.11M
Net income
$-5.09M
Diluted EPS
-0.11
Operating cash flow
$1.27M
Free cash flow
$1.10M
Fetching…
Sources
Revenue
$23.64M
Net income
$-2.94M
Diluted EPS
-0.07
Operating cash flow
$-5.42M
Free cash flow
$-6.36M
Fetching…
Sources
Is it cheap or expensive?
Fair value $7.78 vs current price $64.30
Wall Street consensus is the average analyst price target: $91.60 (1,076.7% higher than our fair-value estimate).
Our most-likely fair value is $7.78 a share — about 87.9% below today's price of $64.30, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $315.7M - more cash than debt. Interest coverage -16.4x.
Net debt
$-315.67M
Interest coverage
-16.40x
AXT, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
AXTI
BASELINE
AXT, Inc.
Total debt $101.53M Interest coverage -16.40x This is the baseline the peer rows are being compared against.
Total debt $1.80B Interest coverage -1.82x Neither company has much profit cushion over interest right now.
Total debt $3.55B Interest coverage 4.74x This peer still has a real interest-payment cushion, while AXTI does not.
Total debt $5.14M Interest coverage -598.10x Neither company has much profit cushion over interest right now.
Total debt $4.74B Interest coverage 17.63x This peer still has a real interest-payment cushion, while AXTI does not.
What you should know
The case for and against AXTI
3 Rewards
1 Risk
Rewards
-
Revenue grew 42.1% last year.
-
Returns 1.0% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 1/10 years.
Risks
-
Stock trades 18005.8% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
2,143.33x
Forward P/E
28.58x
P/B
4.67x
P/S
33.59x
EV/EBITDA
288.54x
PEG ratio
12.09x
Profitability
How much profit each dollar creates
Gross margin
32.2%
Operating margin
21.9%
Net margin
3.2%
ROE
1.0%
ROA
0.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.11x
Current ratio
4.76x
Quick ratio
3.61x
Total debt
$101.53M
Total cash
$417.20M
Growth
How the business has been compounding
Revenue TTM
$125.51M
Revenue 5Y CAGR
-10.5%
EPS TTM
0.03
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-5.76M
Free CF TTM
$-18.78M
FCF margin
-15.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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