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For the second quarter, the Zacks Consensus Estimate for revenues is pegged at $164.79 million, indicating growth of 13.9% from the year-ago quarter’s reported value.
The Zacks Consensus Estimate for earnings is pegged at 30 cents per share, suggesting a fall of 37.5% from the year-ago reported figure. The figure has been unchanged over the past 30 days.
Image Source: Zacks Investment Research
ACMR has an impressive earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 67.74%. Its earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 210.15%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for ACM Research this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
ACM Research’s strength in semiconductor fabrication on the back of its robust cleaning and front-end processing tools, and differentiated technology is likely to have continued driving its top-line growth in the second quarter.
Growing demand for single-wafer cleaning tools and mature nodes is expected to have been a major positive. The solid adoption of ACMR’s flagship SAPS Tahoe and TEBO single-wafer cleaning products remains noteworthy.
The growing demand for the company's chiplet designs, owing to the current artificial intelligence (AI) boom, is expected to have bolstered its presence in the advanced packaging market in the quarter under review.
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 anticipated to have been a tailwind.
ACM Research’s expanding packaging tool offerings like coder, developer, squabber, PR stripper, and web and service spare parts are expected to have bolstered the Advanced Packaging segment’s performance in the quarter under review.
Strong momentum across evaluation tools, including its Track and Plasma-Enhanced Chemical Vapor Deposition platforms, is expected to have contributed well.
Strengthening Electrochemical Plating, Furnace and other technologies on the back of ACMR’s patented plating technologies, such as multi-zone anodes for superior uniformity control, rubber-seal plating chucks for superior sealing and vacuum pre-wetting of wafers, are likely to have favored the quarterly performance.
The company’s growing momentum in sulfuric acid peroxide mixing is expected to have been another positive.
Price Performance & Valuation
ACM Research’s shares have lost 23.2% on a year-to-date basis against the industry’s decline of 21.7%. The Zacks Computer & Technology sector and the S&P 500 index have rallied 10.3% and 9% in the same time frame, respectively.
ACMR has also underperformed its peers — Lam Research (LRCX - Free Report) and Applied Materials (AMAT - Free Report) . While LRCX has lost 1.7%, AMAT has gained 12.2% year to date.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Now, let us look at the value that ACM Research offers to its investors at current levels.
Currently, ACMR is trading at a premium with a trailing 12-month EV/EBITDA of 6.68X compared with the industry’s 5.13X, reflecting a slightly stretched valuation at present.
Image Source: Zacks Investment Research
Investment Thesis
ACM Research’s strong positioning in the semiconductor fabrication space on the back of its multi-product portfolio and strong customer base bodes well for its long-term prospects. The semiconductor industry, which has been staging a solid rebound this year on the optimism surrounding AI, is a major tailwind for the company.
Against this backdrop, the company’s strengthening foothold across international markets like the United States, Europe and Korea, strong China localization trend, increasing mature node investment in China, and new product cycles remain positives.
However, ACM Research faces significant challenges from macroeconomic uncertainties and intensifying competition in the semiconductor industry.
The negative impacts of escalating tensions between the United States and China do not bode well for semiconductor companies. Changes in the spending patterns of key customers and supply-chain constraints are other headwinds.
These factors are making the near-term prospects of ACMR foggy.
Conclusion
While recent challenges have impacted investor sentiment, the company's fundamental strength and the recovering semiconductor industry indicate room for growth.
Given the combination of both risks and rewards, we suggest the existing ACMR shareholders maintain their positions. However, new investors may consider waiting for a more favorable entry point for ACM Research.
Image: Bigstock
ACM Research's (ACMR) Q2 Earnings Coming Up: Should You Buy or Sell?
ACM Research (ACMR - Free Report) is scheduled to report second-quarter 2024 results on Aug 7.
For the second quarter, the Zacks Consensus Estimate for revenues is pegged at $164.79 million, indicating growth of 13.9% from the year-ago quarter’s reported value.
The Zacks Consensus Estimate for earnings is pegged at 30 cents per share, suggesting a fall of 37.5% from the year-ago reported figure. The figure has been unchanged over the past 30 days.
Image Source: Zacks Investment Research
ACMR has an impressive earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 67.74%. Its earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 210.15%.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for ACM Research this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
ACM Research has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Focus Ahead of Q2 Earnings
ACM Research’s strength in semiconductor fabrication on the back of its robust cleaning and front-end processing tools, and differentiated technology is likely to have continued driving its top-line growth in the second quarter.
Growing demand for single-wafer cleaning tools and mature nodes is expected to have been a major positive. The solid adoption of ACMR’s flagship SAPS Tahoe and TEBO single-wafer cleaning products remains noteworthy.
The growing demand for the company's chiplet designs, owing to the current artificial intelligence (AI) boom, is expected to have bolstered its presence in the advanced packaging market in the quarter under review.
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 anticipated to have been a tailwind.
ACM Research’s expanding packaging tool offerings like coder, developer, squabber, PR stripper, and web and service spare parts are expected to have bolstered the Advanced Packaging segment’s performance in the quarter under review.
Strong momentum across evaluation tools, including its Track and Plasma-Enhanced Chemical Vapor Deposition platforms, is expected to have contributed well.
Strengthening Electrochemical Plating, Furnace and other technologies on the back of ACMR’s patented plating technologies, such as multi-zone anodes for superior uniformity control, rubber-seal plating chucks for superior sealing and vacuum pre-wetting of wafers, are likely to have favored the quarterly performance.
The company’s growing momentum in sulfuric acid peroxide mixing is expected to have been another positive.
Price Performance & Valuation
ACM Research’s shares have lost 23.2% on a year-to-date basis against the industry’s decline of 21.7%. The Zacks Computer & Technology sector and the S&P 500 index have rallied 10.3% and 9% in the same time frame, respectively.
ACMR has also underperformed its peers — Lam Research (LRCX - Free Report) and Applied Materials (AMAT - Free Report) . While LRCX has lost 1.7%, AMAT has gained 12.2% year to date.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
Now, let us look at the value that ACM Research offers to its investors at current levels.
Currently, ACMR is trading at a premium with a trailing 12-month EV/EBITDA of 6.68X compared with the industry’s 5.13X, reflecting a slightly stretched valuation at present.
Image Source: Zacks Investment Research
Investment Thesis
ACM Research’s strong positioning in the semiconductor fabrication space on the back of its multi-product portfolio and strong customer base bodes well for its long-term prospects. The semiconductor industry, which has been staging a solid rebound this year on the optimism surrounding AI, is a major tailwind for the company.
Against this backdrop, the company’s strengthening foothold across international markets like the United States, Europe and Korea, strong China localization trend, increasing mature node investment in China, and new product cycles remain positives.
However, ACM Research faces significant challenges from macroeconomic uncertainties and intensifying competition in the semiconductor industry.
The negative impacts of escalating tensions between the United States and China do not bode well for semiconductor companies. Changes in the spending patterns of key customers and supply-chain constraints are other headwinds.
These factors are making the near-term prospects of ACMR foggy.
Conclusion
While recent challenges have impacted investor sentiment, the company's fundamental strength and the recovering semiconductor industry indicate room for growth.
Given the combination of both risks and rewards, we suggest the existing ACMR shareholders maintain their positions. However, new investors may consider waiting for a more favorable entry point for ACM Research.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.