Axcelis (ACLS) Purion Shipments Continue to Gain Traction
Axcelis Technologies, Inc ACLS recently announced that it shipped Purion XE high energy and Purion H high current implanters to various fabs in Korea and China for manufacturing of DRAM memory devices. The shipments also included a follow-on shipment to an existing customer in Korea.
With these new shipments, the company has expanded its presence in China. All the systems are shipped in the fourth quarter of 2023.
Prior to this, the company shipped Purion EXE SiC Power Series 200mm high energy implanter to a Japan-based SiC power device chipmaker in October 2023. ACLS also transported Purion Dragon high current implanter to a leading Europe-based research and innovation center in nanoelectronics and digital technologies in the third quarter of 2023.
Axcelis is a leading producer of ion implantation equipment used in the fabrication of semiconductors.
The top-line performance is being driven by robust customer demand for Purion suite of products, especially in the silicon-carbide power market. The silicon-carbide power device market is being driven by transition electric vehicles. This, in turn, is boosting demand for Purion products, especially PurionH200 silicon carbide, Purion XE silicon carbide systems and Purion M silicon carbide tool.
ACLS expects more than 60% of its shipped system revenues from power markets in 2023. It expects nearly 35% of total system revenues to be generated from silicon carbide applications in 2023. The power device market segment represented 39% of the company’s shipped system revenues in 2022.
In the third quarter of 2023, ACLS reported revenues of $292.3 million, up 6.7% year over year.
Driven by solid growth of Purion Power Series product line, management continues to anticipate revenues for 2023 to be greater than $1.1 billion, suggesting nearly 20% uptick year over year. For the fourth quarter, Axcelis expects revenues of $295 million. By 2025, the company projects revenues of $1.3 billion.
The company continues to invest in employees and infrastructure to achieve its $1.3 billion revenue target in 2025. As part of this strategy, it recently set up a new logistics center in Beverly, MA, to boost logistics and warehouse operations. The state-of-the-art facility is designed to provide flexibility for the company's manufacturing operations, expand customer base and drive growth in the long haul.
ACLS’ performance is likely to be affected due to volatile supply-chain dynamics and global macroeconomic weakness. Increasing expenses toward research and development, and infrastructure are likely to be headwinds.
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ACLS currently carries a Zacks Rank #3 (Hold).
Axcelis is witnessing strong momentum, with shares having soared 54.5% year to date compared with 28.2% and 19.1% growth of the sub-industry and S&P Composite, respectively.
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Cadence Design Systems CDNS, Adobe ADBE and Watts Water Technologies WTS, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cadence’s 2023 EPS has remained unchanged in the past seven days at $5.11. CDNS’ long-term earnings growth rate is 19.5%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 4.1%. Shares of CDNS have surged 61.5% in the past year.
The Zacks Consensus Estimate for Adobe’s fiscal 2024 EPS has remained unchanged in the past 30 days at $17.86. ADBE’s long-term earnings growth rate is 13.5%. Shares of ADBE have gained 80.9% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 2.8% in the past 60 days to $8.00.
WTS’ earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 35% in the past year.
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