Needham & Company Downgrades AXT, Inc. (AXTI) to Hold After Weak Q3, Guidance
Needham & Company downgraded AXT, Inc. (NASDAQ: AXTI) from Buy to Hold following weak Q3 results and lower gudiance.
The analyst comments: "We are downgrading AXTI from a Buy to a Hold following a weak 3Q12 report with lower guidance. With weak demand in several end markets and a build-up of channel inventory, we believe the substrate business will not see much recovery in 1H13 even if one particular market improves. While Ga prices have recently stabilized, we believe weak end demand and oversupply of the raw material will prevent prices from moving substantially higher, limiting contributed profit and preventing margins from recovering. Although AXTI may look cheap at just 0.74X P/TBV, we believe persistent sector weakness and a lack of positive catalysts will likely keep the stock from moving higher. Therefore, we believe a Hold rating is more appropriate at this time."
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 $3.19 yesterday, with a 52 week range of $2.75-$6.84.
The analyst comments: "We are downgrading AXTI from a Buy to a Hold following a weak 3Q12 report with lower guidance. With weak demand in several end markets and a build-up of channel inventory, we believe the substrate business will not see much recovery in 1H13 even if one particular market improves. While Ga prices have recently stabilized, we believe weak end demand and oversupply of the raw material will prevent prices from moving substantially higher, limiting contributed profit and preventing margins from recovering. Although AXTI may look cheap at just 0.74X P/TBV, we believe persistent sector weakness and a lack of positive catalysts will likely keep the stock from moving higher. Therefore, we believe a Hold rating is more appropriate at this time."
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 $3.19 yesterday, with a 52 week range of $2.75-$6.84.