One-glance verdict
Undervalued
$47.43 our estimate vs market $29.91
Wall Street consensus: $41.33 (-12.9% lower than our fair-value estimate)
37% below our estimate, below the bear case
Fundamentals snapshot
Photronics, Inc.
PLAB · NMS · Technology · Semiconductor Equipment & Materials
Current price
$29.91
52-week range
$20.05 - $56.00
Market cap
$1.76B
Balance sheet
Healthy
3,784.75x Strong cushion
Net cash $668.92M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 2.1% last year.
- Reward Returns 13.8% on equity, ahead of 66% of its peers.
- Risk Forward P/E (14.4x) is higher than trailing (10.6x) - earnings are expected to drop.
- Risk Stock trades 9.7% above its 5-year average P/E.
What this company does
Photronics, Inc.
Photronics creates and sells photomasks, which act like highly detailed stencils used to print circuit patterns onto the materials that become computer chips and flat-panel displays. The company makes its money selling these essential "stencils" to the big electronics manufacturers in Asia, the US, and Europe. This makes Photronics a key supplier in the global technology supply chain (the entire network of businesses involved in creating and delivering a product to a consumer).
How the company got here
Founded in a Connecticut garage in 1969, Photronics started as a small, local supplier of a critical part for making computer chips. Over the years, it grew by acquiring the in-house photomask operations of larger electronics companies. As chip and display manufacturing increasingly moved to Asia, Photronics expanded globally, setting up facilities in Taiwan, Korea, and China to be close to its customers. This turned the company from a U.S.-based supplier into a major international player in its specialized field.
What it actually does
Think of Photronics as a stencil-maker for the electronics industry. The company creates ultra-precise glass plates called photomasks, which hold the master blueprints for electronic circuits. Chipmakers and display manufacturers shine a special light through these photomasks to print the intricate circuit patterns onto silicon wafers (the raw material for computer chips) or display panels. Every single electronic chip and modern flat-screen display needs a set of these photomasks to be manufactured.
Integrated Circuits (IC)
This is the company's largest business, making up the majority of its sales. It creates the photomasks used to manufacture all types of computer chips, from the processors in your phone to the memory chips in a data center. Chip manufacturers, known as foundries (factories that make chips for other companies) and integrated device manufacturers (companies that design and make their own chips), pay Photronics for these essential 'stencils'. The trend towards smaller, more powerful chips requires more advanced and expensive photomasks, which is a key focus for this segment.
Flat Panel Displays (FPD)
This segment, which accounts for a smaller portion of revenue, produces photomasks for the screens in devices like TVs, smartphones, and car dashboards. Display makers use these large, high-precision plates to create the patterns of pixels and electronics that form the images you see. The business is driven by the demand for newer display technologies like OLED and foldable screens, which require more advanced photomasks.
What management is betting on now
The company's strategy focuses on a few key areas. First, they are investing heavily in technology to make the most advanced photomasks for the newest generations of powerful and efficient computer chips. Second, they are expanding their manufacturing facilities in the United States and Asia to support the trend of regionalization (building more resilient, local supply chains for critical parts). Finally, management is focused on providing strong local support to its customers, believing that being close and responsive is a major competitive advantage.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$43.27M
FY2025 Q3
$-29.10M
FY2025 Q4
$25.22M
FY2026 Q2
$49.62M
FY2026 Q3
$1.23M
FY2026 Q4
$39.35M
Revenue
$216.05M
Net income
$28.92M
Diluted EPS
0.49
Operating cash flow
$76.33M
Free cash flow
$39.35M
Fetching…
Sources
Revenue
$209.94M
Net income
$31.43M
Diluted EPS
0.54
Operating cash flow
$47.03M
Free cash flow
$1.23M
Fetching…
Sources
Revenue
$225.07M
Net income
$42.94M
Diluted EPS
0.74
Operating cash flow
$97.25M
Free cash flow
$49.62M
Fetching…
Sources
Revenue
$210.39M
Net income
$22.89M
Diluted EPS
0.39
Operating cash flow
$50.05M
Free cash flow
$25.22M
Fetching…
Sources
Revenue
$210.99M
Net income
$8.86M
Diluted EPS
0.15
Operating cash flow
$31.45M
Free cash flow
$-29.10M
Fetching…
Sources
Revenue
$212.14M
Net income
$42.85M
Diluted EPS
0.68
Operating cash flow
$78.47M
Free cash flow
$43.27M
Fetching…
Sources
Is it cheap or expensive?
Fair value $47.43 vs current price $29.91
Wall Street consensus is the average analyst price target: $41.33 (-12.9% lower than our fair-value estimate).
Our most-likely fair value is $47.43 a share — about 58.6% above today's price of $29.91, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $668.9M - more cash than debt. Interest coverage 3784.7x.
Net debt
$-668.92M
Interest coverage
3,784.75x
Photronics, Inc.'s profit covers its interest bill about 3784.7 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
PLAB
BASELINE
Photronics, Inc.
Total debt $3.89M Interest coverage 3,784.75x This is the baseline the peer rows are being compared against.
Total debt $261.19M Interest coverage 4.88x -100% vs PLAB Carries about 775.0x less debt cushion than PLAB.
Total debt $69.81M Interest coverage 22.24x -99% vs PLAB Carries about 170.1x less debt cushion than PLAB.
Total debt $331.24M Interest coverage -29.03x -100% vs PLAB This peer has almost no interest-payment cushion compared with PLAB.
Total debt $2.67B Interest coverage 6.20x -100% vs PLAB Carries about 610.9x less debt cushion than PLAB.
Total debt $1.38B Interest coverage 13.27x -100% vs PLAB Carries about 285.2x less debt cushion than PLAB.
What you should know
The case for and against PLAB
3 Rewards
3 Risks
Rewards
-
Revenue grew 2.1% last year.
-
Returns 13.8% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
Forward P/E (14.4x) is higher than trailing (10.6x) - earnings are expected to drop.
-
Stock trades 9.7% above its 5-year average P/E.
-
Operating margin compressed from 25.7% to 21.1% over 3 years.
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)
10.64x
Forward P/E
14.40x
P/B
1.36x
P/S
2.04x
EV/EBITDA
5.80x
PEG ratio
2.64x
Profitability
How much profit each dollar creates
Gross margin
33.7%
Operating margin
21.1%
Net margin
19.0%
ROE
13.8%
ROA
6.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.00x
Current ratio
4.94x
Quick ratio
4.43x
Total debt
$3.89M
Total cash
$672.81M
Growth
How the business has been compounding
Revenue TTM
$866.82M
Revenue 5Y CAGR
6.4%
EPS TTM
2.81
EPS 5Y CAGR
5.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$308.43M
Free CF TTM
$59.66M
FCF margin
6.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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