Q3 Semiconductor Manufacturing Earnings Review: First Prize Goes to Nova (NASDAQ:NVMI)
As Q3 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the semiconductor manufacturing stocks, including Nova (NASDAQ:NVMI) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 0.6% while next quarter's revenue guidance was 3.9% below consensus. Inflation (despite slowing) has investors prioritizing near-term cash flows, but semiconductor manufacturing stocks held their ground better than others, with the share prices up 29.8% on average since the previous earnings results.
Best Q3: Nova (NASDAQ:NVMI)
Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Nova reported revenues of $128.8 million, down 10.5% year on year, topping analyst expectations by 4.6%. It was a strong quarter for the company, with a significant improvement in its inventory levels and an impressive beat of analysts' EPS estimates.
"Nova's performance this quarter exceeded the company's revenue and profitability guidance and our goal is to maintain similar business levels in the next quarter as well, making the second half of 2023 stronger than the first," said Gaby Waisman, President and CEO.
Nova scored the biggest analyst estimates beat of the whole group. The stock is up 35.4% since the results and currently trades at $137.71.
We think Nova is a good business, but is it a buy today? Read our full report here, it's free.
Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.72 billion, down 0.4% year on year, outperforming analyst expectations by 3.4%. It was a strong quarter for the company, with an impressive beat of analysts' EPS and revenue estimates.
The stock is up 8.4% since the results and currently trades at $167.74.
Is now the time to buy Applied Materials? Access our full analysis of the earnings results here, it's free.
Slowest Q3: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.
IPG Photonics reported revenues of $301.4 million, down 13.6% year on year, falling short of analyst expectations by 4%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter.
The stock is up 16.6% since the results and currently trades at $97.33.
Read our full analysis of IPG Photonics's results here.
Teradyne (NASDAQ:TER)
Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.
Teradyne reported revenues of $703.7 million, down 14.9% year on year, surpassing analyst expectations by 2.9%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
The stock is up 21.5% since the results and currently trades at $106.78.
Read our full, actionable report on Teradyne here, it's free.
Lam Research (NASDAQ:LRCX)
Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $3.48 billion, down 31.4% year on year, surpassing analyst expectations by 1.9%. It was a strong quarter for the company, with an impressive beat of analysts' EPS estimates and a significant improvement in its inventory levels.
Lam Research had the slowest revenue growth among its peers. The stock is up 29.1% since the results and currently trades at $830.07.
Read our full, actionable report on Lam Research here, it's free.
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The author has no position in any of the stocks mentioned
