One-glance verdict
Within fair range
$21.09 our estimate vs market $42.67
Wall Street consensus: $61.33 (190.8% higher than our fair-value estimate)
102% above our estimate
Fundamentals snapshot
Veeco Instruments Inc.
VECO · NMS · Technology · Semiconductor Equipment & Materials
Current price
$42.67
52-week range
$23.31 - $86.63
Market cap
$2.60B
Balance sheet
Healthy
4.88x Stretched
Net cash $168.21M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 45.8% last year.
- Reward Returns 2.6% on equity, ahead of 16% of its peers.
- Risk Stock trades 337.0% above its 5-year average P/E.
- Risk Operating margin compressed from 9.3% to 6.7% over 3 years.
What this company does
Veeco Instruments Inc.
Veeco Instruments sells the highly specialized machines that other companies need to manufacture semiconductors, which are the tiny electronic chips that power everything from phones to data centers. The company's business depends on chipmakers building new factories and upgrading their equipment to meet the world's growing appetite for more powerful electronics.
How the company got here
Veeco started in 1945 when two scientists from the Manhattan Project created a device to detect helium leaks. For many years, it was part of other companies, but in 1990, its own managers bought the instrument-making part of the business to run it independently. The company has grown by acquiring other technology firms, with a key turning point in 2017 when it bought Ultratech, a move that significantly expanded its business of selling equipment to chip makers. This has shifted its focus heavily toward the semiconductor industry, which makes the tiny electronic brains for all modern technology.
What it actually does
Veeco doesn't make the computer chips in your phone or car, but it builds the complex, high-precision machines that chip companies use to manufacture those chips. Think of it like this: if a chip factory is a kitchen, Veeco provides some of the most important and specialized ovens and tools. These machines perform incredibly delicate tasks, like depositing super-thin layers of materials onto silicon wafers (the round platters that chips are built on) or using lasers for precise heating steps. The equipment Veeco sells is essential for making everything from computer memory and processors to the components that enable 5G networks and power electric vehicles.
Semiconductor
This is Veeco's largest business, making up the majority of its sales, at over 70% of its total revenue. Its customers are the big companies that manufacture logic chips (the processors that act as the 'brain' of a device) and memory chips. Veeco's machines, particularly its laser annealing (using a laser for a very quick, targeted heat treatment) and wet processing (using specialized liquids to clean and prepare chip surfaces) systems, are critical steps in making these advanced chips smaller and more powerful.
Compound Semiconductor
This is a smaller but fast-growing part of Veeco's business. Instead of using only silicon, these special-purpose chips are made from other materials, called compounds, like gallium nitride (GaN). Veeco's equipment, particularly its MOCVD machines that grow ultra-pure crystal layers, helps create chips for 5G devices, power electronics in electric vehicles, and sensors for facial recognition. Chipmakers pay Veeco for these systems to enable the unique performance of these next-generation devices.
Data Storage
Veeco also sells equipment to companies that make hard disk drives for computers and data centers. Its machines use a technology called ion beam deposition (a precise way of spraying a thin film of material onto a surface) to create the tiny magnetic heads that read and write information on the spinning disks. While still an important business, it represents a smaller slice of the company's revenue compared to its semiconductor-focused segments.
What management is betting on now
The company's main strategy is to focus on the fastest-growing parts of the chip industry, especially technologies needed for Artificial Intelligence (AI) and high-performance computing. Management is investing heavily in its laser and ion beam systems, which help customers solve the difficult challenges of making ever-smaller and more powerful chips. They are also betting on the growth of compound semiconductors for electric vehicles and advanced communications. A major part of their future plan is a pending merger (the combination of two companies into one) with another equipment maker, Axcelis Technologies, to create a larger, more competitive company in the global market.
Price history
How the share price has moved
—
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
$13.62M
FY2024 Q4
$23.21M
FY2025 Q1
$13.24M
FY2025 Q2
$5.45M
FY2025 Q3
$12.96M
FY2025 Q4
$21.65M
FY2026 Q1
$2.83M
FY2026 Q2
$47.72M
Revenue
—
Net income
$11.86M
Diluted EPS
0.18
Operating cash flow
$51.43M
Free cash flow
$47.72M
Fetching…
Sources
Revenue
—
Net income
$-324.00K
Diluted EPS
-0.01
Operating cash flow
$7.93M
Free cash flow
$2.83M
Fetching…
Sources
Revenue
—
Net income
$1.11M
Diluted EPS
0.02
Operating cash flow
$24.93M
Free cash flow
$21.65M
Fetching…
Sources
Revenue
—
Net income
$10.60M
Diluted EPS
0.17
Operating cash flow
$15.53M
Free cash flow
$12.96M
Fetching…
Sources
Revenue
—
Net income
$11.73M
Diluted EPS
0.20
Operating cash flow
$9.04M
Free cash flow
$5.45M
Fetching…
Sources
Revenue
—
Net income
$11.95M
Diluted EPS
0.20
Operating cash flow
$19.99M
Free cash flow
$13.24M
Fetching…
Sources
Revenue
—
Net income
$14.96M
Diluted EPS
0.25
Operating cash flow
$28.39M
Free cash flow
$23.21M
Fetching…
Sources
Revenue
—
Net income
$21.95M
Diluted EPS
0.36
Operating cash flow
$17.61M
Free cash flow
$13.62M
Fetching…
Sources
Is it cheap or expensive?
Fair value $21.09 vs current price $42.67
Wall Street consensus is the average analyst price target: $61.33 (190.8% higher than our fair-value estimate).
Our most-likely fair value is $21.09 a share — about 50.6% away from today's price of $42.67, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $168.2M - more cash than debt. Interest coverage 4.9x.
Net debt
$-168.21M
Interest coverage
4.88x
Veeco Instruments Inc.'s profit covers its interest bill about 4.9 times over. which is stronger 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
VECO
BASELINE
Veeco Instruments Inc.
Total debt $261.19M Interest coverage 4.88x This is the baseline the peer rows are being compared against.
Total debt $69.81M Interest coverage 22.24x +355% vs VECO Carries about 4.6x more debt cushion than VECO.
Total debt $1.47B Interest coverage 4.33x -11% vs VECO Has roughly the same debt cushion as VECO.
Total debt $38.12M Interest coverage -293.99x -100% vs VECO This peer has almost no interest-payment cushion compared with VECO.
Total debt $331.24M Interest coverage -29.03x -100% vs VECO This peer has almost no interest-payment cushion compared with VECO.
Total debt $29.91M Interest coverage 115.35x +2,262% vs VECO Carries about 23.6x more debt cushion than VECO.
What you should know
The case for and against VECO
3 Rewards
2 Risks
Rewards
-
Revenue grew 45.8% last year.
-
Returns 2.6% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Stock trades 337.0% above its 5-year average P/E.
-
Operating margin compressed from 9.3% to 6.7% 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)
112.29x
Forward P/E
14.68x
P/B
2.89x
P/S
3.81x
EV/EBITDA
49.96x
PEG ratio
0.81x
Profitability
How much profit each dollar creates
Gross margin
37.9%
Operating margin
6.7%
Net margin
3.4%
ROE
2.6%
ROA
1.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.29x
Current ratio
3.93x
Quick ratio
2.54x
Total debt
$261.19M
Total cash
$429.40M
Growth
How the business has been compounding
Revenue TTM
$484.76M
Revenue 5Y CAGR
9.9%
EPS TTM
0.38
EPS 5Y CAGR
-39.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$99.83M
Free CF TTM
$53.29M
FCF margin
11.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—