Photronics, Inc. (PLAB) | Investment Case

1. Company Snapshot

1.a. Company Description

Photronics, Inc., together with its subsidiaries, engages in the manufacture and sale of photomask products and services in the United States, Taiwan, Korea, Europe, China, and internationally.The company offers photomasks that are used in the manufacture of integrated circuits and flat panel displays (FPDs); and to transfer circuit patterns onto semiconductor wafers, FDP substrates, and other types of electrical and optical components.It sells its products to semiconductor and FPD manufacturers, designers, and foundries, as well as to other high-performance electronics manufacturers through its sales personnel and customer service representatives.

The company was formerly known as Photronic Labs, Inc.and changed its name to Photronics, Inc.in 1990.

Photronics, Inc.was incorporated in 1969 and is based in Brookfield, Connecticut.

Show Full description

1.b. Last Insights on PLAB

Negative drivers behind Photronics, Inc.'s recent performance include a decline in the company's cash flow from operations, which decreased by 34.4% year-over-year in Q1 2025. Additionally, the company's cash flow from investing activities increased significantly, indicating a substantial outlay of funds. Furthermore, the recent earnings release did not provide any positive surprises, and the company's guidance for the next quarter was muted. The semiconductor industry's cyclical nature and potential headwinds from macroeconomic conditions also pose a risk to Photronics' future performance.

1.c. Company Highlights

Last Price	33.26
Change Percentage	0.90%
Open	34
Previous Close	32.96
Market Cap ( Millions)	2000
Volume	707365
Year High	39.8
Year Low	16.46
M A 50	24.6
M A 200	21.41

FCF Yield	3.23%
Dividend Yield	0.00%
ROE	11.02%
Debt / Equity	0.00%
Net Debt / EBIDTA	-164.41%
Price To Book	1.2
Price Earnings Ratio	14.03
Price To FCF	30.97
Price To sales	2.35
EV / EBITDA	5.03

2. Photronics' Q3 2025 Earnings: A Stable Performance Amidst Strategic Investments

Photronics reported Q3 2025 sales of $210 million, flat year-over-year and sequentially, with non-GAAP diluted EPS of $0.51, exceeding guidance. The company holds $576 million in consolidated cash and short-term investments. Share repurchases totaled $21 million in the quarter. IC revenue fell 5% YoY to $148 million, while FPD revenue rose 14% to $63 million. CFO Eric Rivera noted 34% gross margin and 23% operating margin.

Publication Date: Sep -13

                                    📋 Highlights
                                    Q3 Revenue & EPS::
                                                $210M sales flat YoY/quarter; $0.51 non-GAAP EPS above guidance
Balance Sheet Strength::
                                                $576M cash reserves, $21M stock buybacks in Q3 ($97M YTD)
Geographic Expansion::
                                                Texas (capacity upgrades) and Boise (multi-beam mask writer for advanced ICs) drive U.S. growth
Segment Performance::
                                                FPD revenue +14% to $63M (33% of total), IC revenue -5% to $148M
CapEx & Guidance::
                                                $25M Q3 CapEx ($200M 2025 total); Q4 guidance $201–209M revenue, 20–22% op margin

                                

Financial Performance

The company's financial performance was marked by a stable revenue and an EPS beat. The revenue was flat YoY and sequentially, indicating a stable demand environment. The non-GAAP EPS of $0.51 was higher than expected, driven by operational efficiency. The company's cash position remains strong, with $576 million in consolidated cash and short-term investments.

Strategic Investments and Guidance

Photronics is investing in its US expansion, including capacity upgrades in Texas and a multi-beam mask writer in Idaho for advanced nodes. The company is also evaluating Asia for 6-8nm capability extensions. For Q4, the company guided revenue of $201-209 million, operating margin of 20-22%, and non-GAAP EPS of $0.42-0.48. The CapEx for 2025 is expected to be $200 million.

Valuation and Outlook

With a P/E Ratio of 12.52 and an EV/EBITDA of 4.12, Photronics' valuation appears reasonable. The company's ROE of 9.7% and ROIC of 10.16% indicate a decent return on equity and invested capital. As Eric Rivera stated, the company is prioritizing internal investments and opportunistic buybacks, which should support the stock in the long term. The actual EPS of $0.51 beat estimates of $0.39, indicating a positive surprise.

3. NewsRoom

Photronics, Inc. $PLAB Stock Position Lifted by Boston Partners

Nov -29

Source: defenseworld.net

Photronics, Inc. $PLAB Position Increased by Envestnet Asset Management Inc.

Nov -21

Source: defenseworld.net

Photronics to Report Fourth Quarter 2025 Results on December 10, 2025

Nov -20

Source: globenewswire.com

Photronics to Participate in Upcoming Investor Conferences

Nov -11

Source: globenewswire.com

Photronics: Solid Execution And Strong Capital Allocation Amidst Persisting Macro Headwinds (Still A Buy)

Nov -02

Source: seekingalpha.com

Analysts Set Photronics, Inc. (NASDAQ:PLAB) PT at $31.00

Oct -20

Source: defenseworld.net

New Strong Buy Stocks for Oct. 16: LASR, PLAB, and More

Oct -16

Source: zacks.com

Photronics (PLAB) Recently Broke Out Above the 20-Day Moving Average

Oct -03

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.58%)

6. Segments

Integrated Circuits

Expected Growth: 3.5%

Photronics, Inc.'s Integrated Circuits segment growth of 3.5% is driven by increasing demand for advanced semiconductor devices, particularly in the 5G, IoT, and automotive markets. Additionally, the company's investments in cutting-edge technology and manufacturing capacity expansions are expected to improve efficiency and reduce costs, further supporting growth.

Flat Panel Display

Expected Growth: 3.8%

The 3.8% growth in Flat Panel Display from Photronics, Inc. is driven by increasing demand for high-resolution displays, advancements in OLED technology, and rising adoption in emerging markets. Additionally, growing sales of smartphones, TVs, and laptops, as well as the trend towards mini-LED and micro-LED displays, contribute to the segment's growth.

7. Detailed Products

High-Volume Fabless Semiconductor Photomasks

Photronics provides high-volume photomasks for fabless semiconductor companies, enabling them to produce high-performance and low-power semiconductor devices.

Mainstream Semiconductor Photomasks

Photronics offers mainstream photomasks for semiconductor companies, supporting the production of a wide range of semiconductor devices.

Advanced Mask Technology (AMT) Solutions

Photronics' AMT solutions provide advanced photomask technologies, including extreme ultraviolet lithography (EUVL) and nanoimprint lithography (NIL), for next-generation semiconductor devices.

Micro-LED Display Photomasks

Photronics provides photomasks for micro-LED displays, enabling the production of high-brightness, high-contrast, and low-power displays.

MEMS and Sensor Photomasks

Photronics offers photomasks for micro-electromechanical systems (MEMS) and sensors, supporting the production of devices like accelerometers, gyroscopes, and pressure sensors.

8. Photronics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Photronics, Inc. operates in the semiconductor industry, which is characterized by rapid technological advancements. While there are substitutes available, such as outsourcing to other manufacturers, the company's strong relationships with its customers and its ability to provide customized solutions reduce the threat of substitutes.

Bargaining Power Of Customers

Photronics, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are highly customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Photronics, Inc. relies on a few key suppliers for its raw materials and equipment. While the company has some bargaining power due to its size and reputation, the suppliers also have some leverage due to the specialized nature of their products.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant capital expenditures and technological expertise. Additionally, Photronics, Inc. has established relationships with its customers and has a strong reputation in the industry, making it difficult for new entrants to gain traction.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with several established players competing for market share. Photronics, Inc. faces intense competition from companies such as Taiwan Semiconductor Manufacturing Company and United Microelectronics Corporation.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	2.46%
Debt Cost	3.95%
Equity Weight	97.54%
Equity Cost	10.97%
WACC	10.79%
Leverage	2.53%

11. Quality Control: Photronics, Inc. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

ACM Research

A-Score: 5.3/10

Value: 4.5

Growth: 9.7

Quality: 6.6

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

NVE

A-Score: 5.0/10

Value: 1.6

Growth: 3.3

Quality: 9.1

Yield: 9.0

Momentum: 2.5

Volatility: 4.7

1-Year Total Return ->

Photronics

A-Score: 4.7/10

Value: 5.9

Growth: 7.3

Quality: 6.8

Yield: 0.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

inTEST

A-Score: 4.1/10

Value: 6.7

Growth: 4.6

Quality: 5.1

Yield: 0.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

QuickLogic

A-Score: 3.2/10

Value: 6.6

Growth: 5.9

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 1.7

1-Year Total Return ->

Trio-Tech

A-Score: 3.0/10

Value: 6.0

Growth: 1.1

Quality: 4.6

Yield: 0.0

Momentum: 3.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

15.09%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.79%

Photronics, Inc. - US7194051022

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PLAB

1.c. Company Highlights

Higher Growth

Better Quality

Stable Momentum

Earnings Miss

Revenues Miss

Fairly Valued

Earnings Beats

Revenues Beats

Cheaper

Average Growth

Average Quality

Weak Momentum

2. Photronics' Q3 2025 Earnings: A Stable Performance Amidst Strategic Investments

Financial Performance

Strategic Investments and Guidance

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.58%)

6. Segments

Integrated Circuits

Expected Growth: 3.5%

Flat Panel Display

Expected Growth: 3.8%

7. Detailed Products

High-Volume Fabless Semiconductor Photomasks

Mainstream Semiconductor Photomasks

Advanced Mask Technology (AMT) Solutions

Micro-LED Display Photomasks

MEMS and Sensor Photomasks

8. Photronics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Photronics, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

33.26$

Current Price

33.26$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA