What Happened:
Shares of semiconductor photomask manufacturer Photronics (NASDAQ:PLAB) jumped 11.2% in the after-market session after the company reported impressive second quarter results that beat analysts' expectations for revenue. Management highlighted the record revenue achieved in the quarter, which was driven by robust demand for integrated circuits and flat panel displays despite mixed demand and macro backdrops for other semiconductor peers. Profitability also improved, with gross margin and operating margin both exceeding expectations. These were driven by positive volume leverage, pricing, favorable mix, and tight control of cost. Lastly, revenue and EPS guidance for the next quarter were ahead of Consensus, making for a solid quarter with many reasons for investor positivity.
What is the market telling us:
Photronics's shares are very volatile and over the last year have had 24 moves greater than 5%. But moves this big are very rare even for Photronics and that is indicating to us that this news had a significant impact on the market's perception of the business.
Photronics is up 15.2% since the beginning of the year, but at $19.31 per share it is still trading 25.1% below its 52-week high of $25.78 from August 2022. Investors who bought $1,000 worth of Photronics's shares 5 years ago would now be looking at an investment worth $2,090.
Is now the time to buy Photronics? Access our full analysis of the earnings results here, it's free.