Photronics Inc (PLAB): A Deep Dive into Financial Metrics and Competitive Strengths
Photronics Inc (NASDAQ:PLAB) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at 20, Photronics Inc has witnessed a surge of 0% over a period, marked against a three-month change of -12.12%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Photronics Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
1. Financial strength rank: 10/10
2. Profitability rank: 9/10
3. Growth rank: 9/10
4. GF Value rank: 5/10
5. Momentum rank: 6/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high financial strength rank and profitability rank, and a slightly lower GF Value rank and momentum rank, GuruFocus assigned Photronics Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding Photronics Inc Business
Photronics Inc is a U.S.-based company that is principally engaged in manufacturing photomasks. The photomasks are photographic quartz plates that contain microscopic images of electronic circuits that are used as a component in the manufacture of integrated circuits and flat-panel displays. The company's assets are located in Taiwan, Korea, and the United States. It generates revenue worldwide, including in the United States, Europe, Taiwan, Korea, China, and elsewhere in Asia, with Taiwan contributing the majority of total revenue.
Financial Strength Breakdown
According to the Financial Strength rating, Photronics Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure.
The Interest Coverage ratio for Photronics Inc stands impressively at 365.89, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5.
With an Altman Z-Score of 5.08, Photronics Inc exhibits a strong defense against financial distress, highlighting its robust financial stability.
With a favorable Debt-to-Revenue ratio of 0.03, Photronics Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Photronics Inc's impressive standing among its peers in generating profit.
Photronics Inc Operating Margin has increased (109.58%) over the past five years, as shown by the following data: 2018: 12.26; 2019: 9.47; 2020: 10.49; 2021: 14.25; 2022: 25.70; .
Furthermore, Alphabet's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 24.57; 2019: 21.94; 2020: 22.09; 2021: 25.17; 2022: 35.68; . This trend underscores the company's growing proficiency in transforming revenue into profit.
The Piotroski F-Score confirms Photronics Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency.
Growth Rank Breakdown
Ranked highly in Growth, Photronics Inc demonstrates a strong commitment to expanding its business.
The company's 3-Year Revenue Growth Rate is 19.2%, which outperforms better than 67.21% of 863 companies in the Semiconductors industry
Moreover, Photronics Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 38.7, and the rate over the past five years is 22.3. This trend accentuates the company's continued capability to drive growth.
Next Steps
Given the company's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. This makes Photronics Inc a compelling investment opportunity for those seeking robust returns.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
