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ACM Research (ACMR) Gains 57.4% in a Year: How to Play It Now?
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ACM Research (ACMR - Free Report) shares have gained 57.4% in the past year, outperforming the broader Zacks Computer & Technology sector, the industry and the S&P 500 index’s increases of 31.5%, 33.7% and 20.3%.
The company is riding on its strong positioning in the semiconductor fabrication space on the back of its robust cleaning and front-end processing tools, and differentiated technology. Its tools are ideal for fabricating foundry, logic and memory chips, including DRAM and 3D NAND-flash chips.
ACM Research’s growing footprint in the United States, Europe and Korea, strong China localization trend, increasing mature node investment in China, and new product cycles are major positives.
ACMR has more than 498 patents in the United States, the People’s Republic of China or mainland China, Japan, Singapore, Korea and Taiwan.
One-Year Price Performance
Image Source: Zacks Investment Research
However, ACM Research is currently trading below its 50-day moving average, indicating a bearish trend.
Market uncertainties, inflationary pressure, escalating geo-political tensions between the United States and China, and the rising cost of technological innovations are near-term concerns for the company.
ACMR faces strong competitive pressure from major players like Lam Research (LRCX - Free Report) and Applied Materials (AMAT - Free Report) in the wafer fabrication space.
ACMR Shares Trading Below 50-Day SMA
Image Source: Zacks Investment Research
Strong Portfolio Boosts Long-Term Prospects
ACM Research’s multi-product portfolio is helping it solidify its presence in the semiconductor industry, which has been staging a solid rebound on the optimism surrounding artificial intelligence (AI). This has been a positive for wafer fab equipment spending, which, in turn, bodes well for the company.
The growing demand for the company's chiplet designs, driven by the rising AI trend, is aiding it in capitalizing on growth opportunities present in the booming advanced packaging market.
ACM Research also capitalizes on the growing demand for single-wafer cleaning tools across various sectors on the back of its flagship products, namely SAPS, Tahoe and TEBO. At the lower end, the company is enjoying the solid adoption of its semi-critical tools, including auto bench.
In first-quarter 2024, revenues from the single wafer cleaning product Tahoe and a semi-critical cleaning product grew 199% year over year and represented 72% of the total revenues.
The company’s growing momentum in sulfuric acid peroxide mixing (SPM) remains a major positive. It estimates the total available market of its SPM tool to be 25-30% of the total front-end cleaning market.
Strengthening Electrochemical Plating, Furnace and other technologies on the back of its patented plating technologies, like multi-zone anodes for superior uniformity control, rubber-seal plating chucks for superior sealing, and vacuum pre-wetting of wafers, is a plus.
Strong momentum across evaluation tools, including ACM Research’s Track and Plasma-Enhanced Chemical Vapor Deposition platforms, is another positive.
On the international front, the solid uptake of ULTRA C v Vacuum Cleaning Tool by major customers to meet the flux removal requirement for chiplets and other advanced 3D packaging structures is contributing well.
Backed by the robust portfolio strength, ACM Research remains engaged with multiple customers in both international and domestic markets, which, in turn, is expected to deliver substantial revenue growth this year, and in 2025 and beyond.
ACMR’s customer base includes the likes of Shanghai Huali Microelectronics, Semiconductor Manufacturing International, SK Hynix, Yangtze Memory Technologies, ChangXin Memory Technologies, Nantong Tongfu Microelectronics and Wafer Works Corporation.
Estimates at a Glance
ACM Research’s compelling product portfolio, strong position in the semiconductor industry and growing clientele are expected to drive its top-line growth in the long run.
Its long-term target of more than $1 billion in revenues is noteworthy.
The company also expects 2024 revenues between $650 million and $725 million. The Zacks Consensus Estimate for the same is pegged at $707.51 million, indicating year-over-year growth of 26.9%.
ACMR's Strong Outlook
Image Source: ACMR
The Zacks Consensus Estimate for earnings stands at $1.60 per share, which has been unchanged over the past 30 days.
Conclusion
Although ACM Research’s long-term prospects are bright, its near-term prospects remain foggy due to high inflation and tightening U.S.-China trade policies.
This is reflected by the company’s Value Style Score of C, which suggests a stretched valuation at this moment.
Image: Bigstock
ACM Research (ACMR) Gains 57.4% in a Year: How to Play It Now?
ACM Research (ACMR - Free Report) shares have gained 57.4% in the past year, outperforming the broader Zacks Computer & Technology sector, the industry and the S&P 500 index’s increases of 31.5%, 33.7% and 20.3%.
The company is riding on its strong positioning in the semiconductor fabrication space on the back of its robust cleaning and front-end processing tools, and differentiated technology. Its tools are ideal for fabricating foundry, logic and memory chips, including DRAM and 3D NAND-flash chips.
ACM Research’s growing footprint in the United States, Europe and Korea, strong China localization trend, increasing mature node investment in China, and new product cycles are major positives.
ACMR has more than 498 patents in the United States, the People’s Republic of China or mainland China, Japan, Singapore, Korea and Taiwan.
One-Year Price Performance
Image Source: Zacks Investment Research
However, ACM Research is currently trading below its 50-day moving average, indicating a bearish trend.
Market uncertainties, inflationary pressure, escalating geo-political tensions between the United States and China, and the rising cost of technological innovations are near-term concerns for the company.
ACMR faces strong competitive pressure from major players like Lam Research (LRCX - Free Report) and Applied Materials (AMAT - Free Report) in the wafer fabrication space.
ACMR Shares Trading Below 50-Day SMA
Image Source: Zacks Investment Research
Strong Portfolio Boosts Long-Term Prospects
ACM Research’s multi-product portfolio is helping it solidify its presence in the semiconductor industry, which has been staging a solid rebound on the optimism surrounding artificial intelligence (AI). This has been a positive for wafer fab equipment spending, which, in turn, bodes well for the company.
The growing demand for the company's chiplet designs, driven by the rising AI trend, is aiding it in capitalizing on growth opportunities present in the booming advanced packaging market.
ACM Research also capitalizes on the growing demand for single-wafer cleaning tools across various sectors on the back of its flagship products, namely SAPS, Tahoe and TEBO. At the lower end, the company is enjoying the solid adoption of its semi-critical tools, including auto bench.
In first-quarter 2024, revenues from the single wafer cleaning product Tahoe and a semi-critical cleaning product grew 199% year over year and represented 72% of the total revenues.
The company’s growing momentum in sulfuric acid peroxide mixing (SPM) remains a major positive. It estimates the total available market of its SPM tool to be 25-30% of the total front-end cleaning market.
Strengthening Electrochemical Plating, Furnace and other technologies on the back of its patented plating technologies, like multi-zone anodes for superior uniformity control, rubber-seal plating chucks for superior sealing, and vacuum pre-wetting of wafers, is a plus.
Strong momentum across evaluation tools, including ACM Research’s Track and Plasma-Enhanced Chemical Vapor Deposition platforms, is another positive.
On the international front, the solid uptake of ULTRA C v Vacuum Cleaning Tool by major customers to meet the flux removal requirement for chiplets and other advanced 3D packaging structures is contributing well.
Backed by the robust portfolio strength, ACM Research remains engaged with multiple customers in both international and domestic markets, which, in turn, is expected to deliver substantial revenue growth this year, and in 2025 and beyond.
ACMR’s customer base includes the likes of Shanghai Huali Microelectronics, Semiconductor Manufacturing International, SK Hynix, Yangtze Memory Technologies, ChangXin Memory Technologies, Nantong Tongfu Microelectronics and Wafer Works Corporation.
Estimates at a Glance
ACM Research’s compelling product portfolio, strong position in the semiconductor industry and growing clientele are expected to drive its top-line growth in the long run.
Its long-term target of more than $1 billion in revenues is noteworthy.
The company also expects 2024 revenues between $650 million and $725 million. The Zacks Consensus Estimate for the same is pegged at $707.51 million, indicating year-over-year growth of 26.9%.
ACMR's Strong Outlook
Image Source: ACMR
The Zacks Consensus Estimate for earnings stands at $1.60 per share, which has been unchanged over the past 30 days.
Conclusion
Although ACM Research’s long-term prospects are bright, its near-term prospects remain foggy due to high inflation and tightening U.S.-China trade policies.
This is reflected by the company’s Value Style Score of C, which suggests a stretched valuation at this moment.
Hence, investors should wait for a better entry point for ACM Research, which currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.