On Friday, Evercore ISI adjusted its price target for Camtek (NASDAQ: NASDAQ:CAMT), a company specializing in inspection and metrology solutions for the semiconductor industry. The new price target is set at $110.00, up from the previous $100.00, while the firm continues to recommend an Outperform rating on the stock.
The price target increase follows Camtek's impressive financial performance in the March quarter (MarQ), where the company's earnings per share (EPS) surpassed expectations by 12%. Additionally, the forecast for the June quarter (JunQ) is 9% higher than previous estimates. This optimistic outlook is fueled by the revenue from high bandwidth memory (HBM) and chiplet-related products, which have doubled quarter over quarter and now represent 60% of the company's total revenue.
Management at Camtek highlighted a strong order book and visibility extending into the second half of 2024 (2H24), aligning with the view that advanced packaging is the fastest growing segment in semiconductor capital equipment (SCE). Evercore ISI sees Camtek as a direct beneficiary of the increasing adoption of chiplet architectures in artificial intelligence (AI) chips, which tend to have larger die sizes.
Given that over 60% of Camtek's revenue is derived from packaging, Evercore ISI identifies the company as a leading small to mid-cap (SMID-Cap) investment opportunity within the advanced packaging sector. The firm also anticipates that Camtek has the potential to achieve an earnings per share (EPS) of $4 over the next three years. The revised price target represents a 21% upside from the current levels.
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