AXT
53
15070100
A view of the same findings, not a new score. How it works
A good business with a real question mark: the price, a crack, or both.
Biggest deductions
- Multiples vs own history and peers−27
- Chinese export controls−8
- Margin−4
Strengths
- Order book with prepayment+3
- Net cash+2
How the score is built
From 100 to 53, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 2 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 48.20 USD
- Median analyst target
- 93.00 USD
- Upside to median
- +92.9%
- Analysts
- 5
- Target range
- 55.00 – 125.00 USD
- 52-week change
- +506%
- P/E (trailing)
- 87.7
- Forward P/E
- 21.1
- PEG
- n/a
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 3 findings−10 of −30
- −4MarginOperating margin only 3.1% TTM after losses in 2023-2025 (-15 to -28%); Q2 2026 showed a jump to a 44.9% gross margin and USD 11.1m in net income, but the highest full-year level is an operating margin of about 9% (2021-2022).
- −3ROICROIC of 0.5% TTM and at most 5.4% in 2021-2025 (negative in 2023-2025) - far below the cost of capital.
- −3Quality of earningsOperating cash flow is negative (-USD 5.8m TTM) despite profit, and FCF has been negative every year 2021-TTM; inventory turns less than once a year (inventory turnover 0.97).
Price
Today's multiples against the company's own history and its peers. · 1 finding−27 of −35
- −27Multiples vs own history and peersP/S 35 versus 0.95-2.7 in 2021-2024 (9.9 in 2025); EV/Sales 32.5 versus 1.9-3.0; P/B 5.0 versus 0.4-1.3; forward P/E 42.8 versus 16.9-22 in 2021-2023 and in line with Lumentum, even though AXT is a subcontractor with a far lower margin. The stock is +1,189% in a year.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 6 findings−19 of −35
- −8Chinese export controlsChina put InP substrates on the export control list in February 2025; licences have been granted to customers in Europe, Japan, the UK and Canada, but licences for US customers had not yet been issued. Q3 guidance of 66m USD covers only revenue with existing licences, and management cannot predict the timing.
- −4DilutionEquity issue in April 2026 of 8.56m shares at 64.25 USD (approx. 550m USD gross); share count +19.5% over a year.
- −2Tongmei structure and governanceTongmei withdrew its STAR Market listing in June 2026 and is now going for Hong Kong (about 1 year); 11 private equity funds that invested RMB 324m may demand redemption, and a listing will dilute AXT's ownership of the Chinese core business.
- −2Insider tradingCEO Morris Young has sold several times (including 30,832 shares for 1.4m USD in March 2026), and the CFO and board members have also sold; cluster selling around the capital raise. No insider purchases.
- −2Customer concentrationInP growth (64.5% of Q2 revenue) rests on a few laser customers – long-term agreements with Coherent, Lumentum and Casela – which themselves depend on a few hyperscalers.
- −1
Plus
Only documented strengths. · 2 findings+5 of +15
- +3Order book with prepaymentInP order book above 100m USD and long-term agreements, where Casela and Coherent have prepaid 22.3 and 25.4m USD; capacity must rise to approx. 60m USD/quarter by the end of 2026 and 130m by the end of 2027.
- +2Net cashCash of USD 417m against debt of 102m, i.e. net cash of 316m (about 7% of market cap).
Caveats
What the score does not capture, or where the data is weak.
All InP production takes place in China (subsidiary Tongmei), and revenue depends on Chinese export permits; Q3 guidance covers only permitted revenue. Industry set to 'Semiconductors' (substrates/materials have no category of their own). Cyclical set to true because substrate sales follow the semiconductor inventory cycle (revenue -46% in 2023). TTM earnings are small, so P/E and EV/EBITDA are extreme; T2 weights P/S, EV/Sales and forward P/E. The timing of the largest insider sales is not verified in Form 4.
Also in Semiconductors
The highest scores in the same industry.
