AXT (NASDAQ:AXTI) Shares Down 7.4% – Here’s What Happened

AXT Inc (NASDAQ:AXTI)’s stock price traded down 7.4% on Thursday. The company traded as low as $58.32 and last traded at $59.6460. Approximately 2,994,395 shares changed hands during trading, a decline of 70% from the average daily volume of 10,071,590 shares. The stock had previously closed at $64.38.

Key Headlines Impacting AXT

Here are the key news stories impacting AXT this week:

• Positive Sentiment: AXT reported third-quarter adjusted EPS of $0.41, surpassing the $0.31 consensus estimate, while revenue of $73.4 million exceeded expectations of approximately $66 million. Revenue increased 162% year over year, helped by record indium phosphide (InP) sales. AXTI Q3 Earnings Beat on Record InP Sales and Margin Gains
• Positive Sentiment: Management cited strong artificial-intelligence data-center demand, a backlog exceeding $500 million and surging InP requirements. AXT plans aggressive capacity expansion and indicated stronger fourth-quarter expectations, supporting the longer-term growth outlook. AXTI Q3 Earnings Call Highlights AI Demand and Capacity Expansion
• Positive Sentiment: Profitability improved sharply: GAAP gross margin reached approximately 56%, versus 44.9% in the prior quarter and 22.3% a year earlier, while GAAP diluted EPS rose to $0.39 from $0.17. Wedbush also praised AXT’s management following the results. AXT in focus as Wedbush likens management to Jaws hero after strong results
• Neutral Sentiment: B. Riley raised its price target modestly to $56 from $55 but maintained a Neutral rating, indicating limited near-term upside at recent trading levels. B. Riley Financial Ratings
• Negative Sentiment: The decline appears partly driven by profit-taking and risk reduction ahead of earnings after a sharp momentum rally. The stock’s high valuation, semiconductor volatility and sensitivity to export permits and China-related approvals may be prompting investors to lock in gains. AXT Falls as Investors Appear to Take Profits Ahead of Earnings
• Negative Sentiment: Reported insider activity shows 16 open-market sales and no purchases during the past six months, a potential supply and confidence concern for investors.

Analyst Upgrades and Downgrades

AXTI has been the topic of a number of research analyst reports. UBS Group set a $90.00 price target on shares of AXT in a report on Friday, July 31st. B. Riley Financial upped their price objective on AXT from $55.00 to $56.00 and gave the stock a “neutral” rating in a report on Friday. Weiss Ratings raised AXT from a “sell (d-)” rating to a “sell (d+)” rating in a research report on Friday, August 14th. Needham & Company LLC upgraded AXT from a “hold” rating to a “buy” rating and set a $90.00 target price on the stock in a report on Friday, July 31st. Finally, Zacks Research cut AXT from a “strong-buy” rating to a “hold” rating in a report on Tuesday, September 29th. Three analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, AXT has a consensus rating of “Hold” and an average target price of $77.80.

AXT Stock Down 9.6%

The firm’s 50 day simple moving average is $66.26 and its 200-day simple moving average is $64.07. The company has a market capitalization of $3.61 billion, a PE ratio of 122.36 and a beta of 1.86.

AXT (NASDAQ:AXTI) last issued its earnings results on Thursday, October 29th. The semiconductor company reported $0.41 EPS for the quarter, beating analysts’ consensus estimates of $0.31 by $0.10. The business had revenue of $73.41 million for the quarter, compared to the consensus estimate of $66.00 million. AXT had a net margin of 18.53% and a return on equity of 6.35%. As a group, sell-side analysts anticipate that AXT Inc will post 0.80 EPS for the current fiscal year.

Insider Transactions at AXT

In other AXT news, Director Leonard Leblanc sold 4,000 shares of the firm’s stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $96.07, for a total value of $384,280.00. Following the transaction, the director directly owned 113,129 shares of the company’s stock, valued at $10,868,303.03. This trade represents a 3.42% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Corporate insiders own 5.97% of the company’s stock.

Institutional Investors Weigh In On AXT

Several institutional investors and hedge funds have recently modified their holdings of AXTI. BlackRock Inc. purchased a new stake in AXT during the 2nd quarter worth $365,607,000. Bank of America Corp DE lifted its holdings in AXT by 112.0% in the 1st quarter. Bank of America Corp DE now owns 776,300 shares of the semiconductor company’s stock worth $44,234,000 after buying an additional 410,181 shares in the last quarter. Ariose Capital Management Ltd purchased a new position in AXT in the 1st quarter valued at about $39,061,000. Wellington Management Group LLP purchased a new position in AXT in the 2nd quarter valued at about $25,911,000. Finally, Rokos Capital Management LLP acquired a new stake in shares of AXT during the first quarter valued at about $18,842,000. Hedge funds and other institutional investors own 49.52% of the company’s stock.

About AXT

AXT, Inc develops and manufactures compound semiconductor substrates used as the foundation for various high-performance electronic and optoelectronic devices. Its principal products include gallium arsenide (GaAs), indium phosphide (InP), and germanium substrates, along with other specialty materials such as gallium antimonide and indium arsenide.

The company’s substrates are used in applications including wireless communications, fiber-optic and data-center networks, lasers, light-emitting diodes, solar cells, consumer electronics, and aerospace and defense systems.