Value
8.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.9 |
| P/S | 9.0 |
| EV/EBITDA | 8.5 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 14.3x
- ▸PEG: 0.05
- ▸Attractively valued
PLAB · Why this verdict
Why Photronics (PLAB) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With 82% of operations outside the United States, Photronics is highly exposed to geopolitical disruption, currency risk, and export control changes that could materially impair revenue from its largest operating base. Bear case | Non-U.S. revenue contribution decreases below 75% within 12 months as domestic semiconductor capacity expansion creates new domestic demand. | →Stable |
| CounterInternational operations may be a feature rather than a bug — proximity to Asian chip manufacturers who are major photomask customers could be a competitive advantage driving volume. | ||
Photronics trades at a forward P/E of 16.2x and a PEG ratio of 0.06, making it one of the most attractively valued names in its semiconductor equipment peer group where the value score ranks 9.3/10 versus peers. Valuation breakdown | The valuation gap narrows and the stock reaches the analyst price target of $36.55, representing 11.6% upside from $32.74 over 12 months. | →Stable |
| CounterLow PEG ratios in cyclical semiconductor companies often reflect declining growth expectations rather than genuine undervaluation, and revenue has been essentially flat at -0% growth year-over-year. | ||
Photronics has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of 15.6%, including two consecutive beats of 15% and 34.8%, suggesting consistent execution discipline. Earnings | The company beats earnings estimates in at least 2 of the next 3 quarterly reports with positive surprises above 10%. | →Stable |
| CounterThe most recent quarter was a significant miss at -20% surprise (actual $0.42 versus estimate $0.53), breaking the prior beat streak and raising questions about deteriorating margins. | ||
Photronics scores 8 out of 9 on the Piotroski F-Score, indicating broad financial health across profitability, leverage, and operating efficiency dimensions that supports the company's ability to weather cyclical semiconductor downturns. Quality breakdown | Piotroski F-Score remains at 7 or above for the next 4 quarters, confirming sustained financial health. | →Stable |
| CounterFree cash flow represents only 25% of net income — a red flag indicating aggressive non-cash earnings — which could mask deteriorating cash generation even as headline profitability looks acceptable. | ||
With 82% of operations outside the United States, Photronics is highly exposed to geopolitical disruption, currency risk, and export control changes that could materially impair revenue from its largest operating base.
→StableBear case
- Expectation
- Non-U.S. revenue contribution decreases below 75% within 12 months as domestic semiconductor capacity expansion creates new domestic demand.
CounterInternational operations may be a feature rather than a bug — proximity to Asian chip manufacturers who are major photomask customers could be a competitive advantage driving volume.
Photronics trades at a forward P/E of 16.2x and a PEG ratio of 0.06, making it one of the most attractively valued names in its semiconductor equipment peer group where the value score ranks 9.3/10 versus peers.
→StableValuation breakdown
- Expectation
- The valuation gap narrows and the stock reaches the analyst price target of $36.55, representing 11.6% upside from $32.74 over 12 months.
CounterLow PEG ratios in cyclical semiconductor companies often reflect declining growth expectations rather than genuine undervaluation, and revenue has been essentially flat at -0% growth year-over-year.
Photronics has beaten earnings estimates in 3 of the last 4 quarters with an average positive surprise of 15.6%, including two consecutive beats of 15% and 34.8%, suggesting consistent execution discipline.
→StableEarnings
- Expectation
- The company beats earnings estimates in at least 2 of the next 3 quarterly reports with positive surprises above 10%.
CounterThe most recent quarter was a significant miss at -20% surprise (actual $0.42 versus estimate $0.53), breaking the prior beat streak and raising questions about deteriorating margins.
Photronics scores 8 out of 9 on the Piotroski F-Score, indicating broad financial health across profitability, leverage, and operating efficiency dimensions that supports the company's ability to weather cyclical semiconductor downturns.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 7 or above for the next 4 quarters, confirming sustained financial health.
CounterFree cash flow represents only 25% of net income — a red flag indicating aggressive non-cash earnings — which could mask deteriorating cash generation even as headline profitability looks acceptable.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Photronics is an attractively valued semiconductor photomask maker with a forward P/E of 16.2x and PEG ratio of 0.06, but heavy geographic concentration with 82% of operations outside the U.S. and weak near-term price momentum create meaningful execution and macro risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.4 |
| ROA | 4.5 |
| Gross margin | 2.8 |
| Op margin | 8.0 |
| Net margin | 9.2 |
| Current ratio | 8.0 |
| FCF quality | 2.0 |
| Moat | 5.1 |
| Piotroski F | 8.9 |
- ▸Strong margins: 18%
- ▸Earnings quality RED FLAG: 25% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.4 |
| EPS growth | 10.0 |
- ▸Declining revenue: -0%
Momentum
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 3.1 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+5.8%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 9.4 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
- ▸Analyst upside: 45%
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Heavy insider selling — $13,486,957 (0.793% of mkt cap)
Peer rank
6.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.3 |
| quality rank | 7.2 |
| growth rank | 1.2 |
- ▸Attractive P/E vs peers
- ▸Conservative debt levels
Technical
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.9 |
| support resistance | 8.2 |
| 52w position | 0.4 |
| gap | 5.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.4 |
| days to cover | 9.2 |
| volatility | 0.0 |
| put call | 8.9 |
| implied vol | 0.0 |
| beta | 5.5 |
| debt equity | 9.1 |
- ▸High IV: 93%
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- ASYMMETRY:1.6>=1.5
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:52d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.2<4.5
- INSIDER:0.79%=EXTREME
Warning (0)
none
Reward-to-Risk
1.61
Upside
+23.2%
Downside
14.4%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.7B) below institutional reach
SuitabilitySpeculative — Drawdown -48% (>40% off 52w high)
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:1.6>=1.5. Top dim: Value at 8.7; weakest: Insider at 3.0. No conviction either direction.
The strongest dimensions are Value at 8.7, Sentiment at 7.2, and Catalyst at 6.7; the weakest are Insider at 3.0, Momentum at 4.2, and Risk (lower is worse) at 5.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 1.61 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Photomask Valuation Discount
Trip ifStock price drops below $28, implying more than 15% decline from current price of $32.74 without a corresponding analyst target reduction.
- P2Earnings Beat Streak
Trip ifEarnings miss consensus estimates by more than 15% in 2 of the next 4 quarters.
- P3Geographic Concentration Risk
Trip ifNon-U.S. revenue rises above 85% of total revenue for 2 consecutive quarters, increasing geographic concentration risk.
- P4Piotroski Financial Strength
Trip ifFree cash flow as a percentage of net income falls below 15% for 2 consecutive quarters.