- Veeco's fourth quarter was a little lackluster, with revenue upside coming from margin-dilutive legacy LED sales, and first quarter guidance was muted, but underlying operating leverage was good.
- Strong demand for LSA tools is leading the company to add physical capacity, and I expect meaningful near-term (12 months) growth in tools for the storage and 5G RF markets.
- Opportunities like tools for EUV mask blanks and MOCVD tools for producing VCSELs, mLEDS, and GaN power/RF chips are meaningful but further down the road.
- A stronger growth outlook and better margins support a higher multiple to revenue and a near-term fair value in the mid-to-high $20's.
For further details see:
Veeco Instruments - Brief Hiccup In Margins Doesn't Change The Positive Long-Term Story