ACLS - Axcelis: Investor Day Lacked Positive Surprises Downgrading

2024-07-15 11:57:40 ET

Summary

• Axcelis dominates the Ion Implanter industry and is entering a positive revision cycle.
• The company positively pre-announced at the July 9th Investor Day and provided 2027 EPS targets 10% ahead of mine.
• Since Mid-April, NTM P/E gained 9 turns to 23x, above the 5y average of 19.6x. Investors are optimistic.
• Long-term and short-term valuation measures leave too little upside. Downgraded to Hold.

Thesis

Axcelis (NASDAQ: ACLS) is the leading provider of Ion Implant tools, with its Purion line. After suffering from poor earnings revisions trends, concerns over China exposure, and fears of Silicon Carbide supply glut, multiples shrank from Aug-23. We felt this overdone and saw an opportunistic trade to make given the limited downside risk. This investment was in the “Opportunistic” bucket of our investment framework....

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