Camtek's Visibility Boost Amid Market Uncertainty: Analyst Raises Price Target Following Q2 Results

Stifel analyst Brian Chin reiterated a Buy rating on Camtek Ltd. CAMT, raising the price target to $52 from $44.

CAMT reported a second-quarter FY23 revenue decline of 7.3% year-on-year to $73.758 million, beating the consensus of $72.380 million. Non-GAAP EPS of $0.45 topped the consensus of $0.42.

In a broader market lacking visibility, the analyst thinks Camtek's visibility is improving, driven by heterogeneous integration/3D packaging. 

Across the semicap industry, Chin observed two areas of relative strength this year/ off the bottom — China and advanced packaging. Camtek has a favorable mix of both, notes the analyst.

With lower beta and higher growth/visibility deserving of a premium, the analyst boosted the price target of CAMT by 18%.

Camtek is seeing a broadening of order activity across multiple DRAM high bandwidth memory (HBM) customers, with another 10-system order placed in the past week alone, notes Chin. 

This builds further on HBM-related order activity announced in mid-July (likely of similar-to-larger size), adds the analyst.

A majority ~80% of these/other recently disclosed bookings are expected to ship in 2H23, helping drive Camtek's improved 2H growth outlook, Chin further adds.

Overall, the analyst adds that Camtek is well-positioned to capitalize on growth in the broader advanced packaging market.

Price Action: CAMT shares are trading lower by 1.01% to $47.13 on the last check Tuesday.