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A Great Small-Cap, Semiconductor Opportunity

February 7, 2018

Overall, I'm pleased with yesterday's positive response undoing some of the recent stock market damage. I like the strength I'm seeing in small-cap stocks, as well as in the semiconductor stocks. Now, I wouldn't say that we're out of the woods yet, as we need to see the volatility subside. But it looks like the aftershocks will start to get smaller and smaller. And as that happens, I want to make sure you're up-to-date on the earnings report from a great small-cap, semiconductor opportunity…

Axcelis Technologies, Inc. (ACLS) provides equipment and services to leading semiconductor companies around the world. Axcelis develops and manufactures ion implantation and other processing equipment that are used in the fabrication of semiconductors.

It provides a line of high energy, high and medium current implanters for all application requirements. It also provides dry strip systems for smaller wafers. In addition, it offers extensive aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services and customer training. Axcelis Technologies sells its equipment and services to semiconductor chip manufacturers through a direct sales force. 

Following the closing bell on Tuesday, Axcelis Technologies crushed analysts' estimates for its fourth quarter in fiscal year 2017. Total fourth-quarter revenue soared 67.8% year-over-year to $116.4 million, which topped estimates for $109.76 million by 6%. Adjusted earnings per share surged 261.5% year-over-year to $0.47, up from $0.13 per share in the same quarter a year ago. Analysts were expecting earnings of $0.39 per share, so ACLS posted a 20.5% earnings surprise.

For fiscal year 2017, Axcelis Technologies reported total revenue of $410.6 million, up 53.8% over the $267 million in 2016. The company also noted that systems revenue jumped 89% year-over-year. And full-year adjusted earnings per share increased 311% year-over-year to $1.48.

For the first quarter of 2018, Axcelis Technologies expects revenue between $115 million and $120 million. That represents 32.4% to 38.1% annual sales growth. This forecast is also nicely higher than current estimates for $110.58 million. Thanks to the better-than-expected fourth-quarter results and solid forward-looking guidance, ACLS shares opened 7% higher this morning.

And if you're looking for even more small-cap opportunities like this one, I urge you to consider joining my Emerging Growth service today. At Emerging Growth we home in on only the creme-de-la-creme of these smaller companies. Our unique and intensive research process uncovers those under-the-radar stocks that are about to emerge from the pack with unstoppable growth. And our results are outstanding. We've helped individual investors just like you beat the market by nearly 8-to-1 for over 15 years.

But if you aren't ready to join Emerging Growth today, I urge you to stay tuned into this blog. I'll continue revealing some of the top stocks throughout this volatile earnings season.

Until tomorrow,

Louis Navellier

Louis Navellier

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