Section 1: Company Overview and Fundamentals

Company Overview:

Photronics, Inc. is a manufacturer of integrated circuit (IC) and flat panel display (FPD) photomasks. Photomasks are a key element in the manufacture of ICs and FPDs and are used as master’s to transfer circuit patterns onto semiconductor wafers and FPD substrates during the fabrication of ICs, a variety of FPDs and, to a lesser extent, other types of electrical and optical components.

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• PLAB has been corrected by 26.14% in the past three months, on the other hand 26.07% of return in the past six months.

• The stock is leaning towards its lower band of its 52-week range of USD 26.98 and 52-week low price of USD 13.86. Post the announcement of Q3FY23 results the stock has corrected by around 20.37%, with currently price inside a support zone of USD 17-USD 19.
• The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA, with the current oversold RSI of around 19.82.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

The graph below demonstrates that PLAB is more profitable than its industry rivals at the given levels of operation. Also, a higher current ratio for the company denotes better short-term working capital liquidity. It also proves that a business has access to sufficient liquid short-term assets to pay down all current short-term debt, if necessary.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~48.05% of the total shareholding, signifying concentrated shareholding. BlackRock Institutional Trust Company, N.A. and The Vanguard Group, Inc. are the biggest shareholders, holding the maximum stake in the company at ~15.06% and ~8.14%, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q3FY23:

Section 3: Key Risks and Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

  Stock Performance:

• PLAB has been corrected by 26.14% in the past three months, on the other hand 26.07% of return in the past six months.

• The stock is leaning towards its lower band of its 52-week range of USD 26.98 and 52-week low price of USD 13.86. Post the announcement of Q3FY23 results the stock has corrected by around 20.37%, with currently price inside a support zone of USD 17-USD 19.
• The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA, with the current oversold RSI of around 19.82.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings per share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 23, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.

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