One-glance verdict
Undervalued
$54.21 our estimate vs market $27.36
Wall Street consensus: $41.33 (-23.8% lower than our fair-value estimate)
50% below our estimate, below the bear case
Fundamentals snapshot
Photronics, Inc.
PLAB · NMS · Technology · Semiconductor Equipment & Materials
Current price
$27.36
52-week range
$20.05 - $56.00
Market cap
$1.61B
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 (13.2x) is higher than trailing (9.7x) - earnings are expected to drop.
- Risk Operating margin compressed from 25.7% to 21.1% over 3 years.
What this company does
Photronics, Inc.
Photronics makes the stencils, called photomasks, that chip makers use to create the tiny circuits on computer chips and screens for things like TVs and phones. Most of their money comes from selling these essential photomasks to companies that design and build these electronics, and this is important because without these stencils, the chips and screens couldn't be made.
How the company got here
Photronics, Inc. has been around since 1969, starting out as Photonic Labs, Inc. before changing its name in 1990. It's a company that has grown and adapted within the fast-paced technology sector, specifically focusing on a critical component of electronics manufacturing. Over the decades, Photronics has established itself as a key player in providing specialized tools that enable the creation of the tiny, intricate designs found in the computer chips and screens we use every day.
What it actually does
Imagine the incredibly detailed blueprints needed to build a skyscraper; Photronics makes something similar, but for the microscopic world of computer chips and flat-screen displays. They create 'photomasks,' which are essentially high-precision templates or stencils. These photomasks are used in a process called photolithography to transfer complex circuit patterns onto silicon wafers (for chips) and glass substrates (for displays). Without these masks, the tiny components that make our smartphones, computers, and TVs work couldn't be manufactured.
Photomasks for Integrated Circuits
This is a major part of Photronics' business, where they produce photomasks specifically for making integrated circuits, also known as microchips or semiconductors. These masks are used by chip manufacturers to etch the intricate designs that form the brains of electronic devices. Think of them as the master pattern that guides the creation of every tiny transistor and wire on a chip. This segment serves semiconductor designers and manufacturers who rely on these precise templates to produce the chips found in everything from cars to gaming consoles.
Photomasks for Flat Panel Displays (FPDs)
Another significant area for Photronics is the creation of photomasks used in the manufacturing of flat-panel displays, like those found in TVs, computer monitors, and smartphone screens. These masks help define the pixels and other components that create the images we see. Companies that make these advanced screens use Photronics' photomasks to ensure the clarity, color, and responsiveness of their display products. This business line is crucial for the visual technology we interact with daily.
What management is betting on now
Photronics is focused on staying at the forefront of technology by investing in advanced manufacturing capabilities. This means developing and producing more sophisticated photomasks that can handle the ever-increasing complexity and shrinking sizes of circuits and display components. Their strategy involves working closely with customers to meet the demand for next-generation chips and displays, ensuring they remain an essential partner in the electronics supply chain. By continuously improving their technology, they aim to capture more business as the demand for advanced electronics grows globally.
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 $54.21 vs current price $27.36
Wall Street consensus is the average analyst price target: $41.33 (-23.8% lower than our fair-value estimate).
Our most-likely fair value is $54.21 a share — about 98.1% above today's price of $27.36, 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 $262.52M Interest coverage 4.88x -100% vs PLAB Carries about 775.0x less debt cushion than PLAB.
Total debt $41.17M Interest coverage 22.24x -99% vs PLAB Carries about 170.1x less debt cushion than PLAB.
Total debt $335.89M Interest coverage -29.03x -100% vs PLAB This peer has almost no interest-payment cushion compared with PLAB.
Total debt $2.71B Interest coverage 6.20x -100% vs PLAB Carries about 610.9x less debt cushion than PLAB.
Total debt $1.39B 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 (13.2x) is higher than trailing (9.7x) - earnings are expected to drop.
-
Operating margin compressed from 25.7% to 21.1% over 3 years.
-
Stock trades 0.4% 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)
9.74x
Forward P/E
13.17x
P/B
1.24x
P/S
1.86x
EV/EBITDA
5.14x
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
0.0%
Payout ratio
0.0%
Last ex-div date
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