Needham & Company Maintains a 'Buy' on AXT, Inc. (AXTI); Weak Margins; Looking for 2H Pickup

May 3, 2012 7:48 AM EDT Send to a Friend
Get Alerts AXTI Hot Sheet
Price: $2.36 +8.26%

Rating Summary:
    3 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 29 | Down: 45 | New: 4
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Needham & Company maintains a 'Buy' on AXT, Inc. (NASDAQ: AXTI) price target lowered from $8 to $6.

Analyst, Y. Edwin Mok, said, "AXTI reported slightly better than expected 1Q12 revenue but earnings missed consensus estimates. Similarly, 2Q12 revenue guidance is inline but earnings guidance is well below Street’s estimates. A more competitive pricing environment and fallen raw material prices are pressuring margins. However, with prices reaching a very low level and the company working through high cost inventory, we expect margins to gradually recover in 2H12 and 2013, driving leverage back into the model. While we found the report disappointing, we believe the recent decline of stock price already reflects the negatives. We note that even after cutting our earning estimates, AXTI is trading at just 10X our 2013E EPS."

Lowers FY12 EPS estimate from $0.45 to $0.29 and FY13 from $0.58 to $0.48.

For an analyst ratings summary and ratings history on AXT, Inc. click here. For more ratings news on AXT, Inc. click here.

Shares of AXT, Inc. closed at $5.05 yesterday.


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