Shares of ACM Research (ACMR 6.98%) were surging today after the semiconductor cleaning equipment maker posted standout results in its fourth-quarter earnings report.
As of 10:02 a.m. ET, the stock was up 34.8% on the news.
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ACM is the latest chip stock winner
ACM, which supplies high-tech wafer-cleaning equipment primarily to Chinese foundries, reported 57% revenue growth, well ahead of industry-level wafer fab equipment spending in China, to $170.3 million, which was better than estimates at $149.3 million.
Gross margin in the period was down from 49.6% to 46.4%, which was still ahead of its long-term target of 40% to 45%. The company cited a change in factors such as product mix, currency impacts, and sales volume for the decline in gross margin.
Operating expenses were up 50% to $55.7 million, which led to a 40% jump in generally accepted accounting principles (GAAP) operating income to $23.4 million. On an adjusted basis, earnings per share jumped from $0.19 to $0.43, which easily beat the analyst consensus at $0.17.
The company also received qualification for its new SAPS cleaning tool from a large unnamed U.S. manufacturer, which should help drive growth in 2024.
CEO David Wang said, "2023 was another pivotal year in ACM's mission to become a major supplier to the global semiconductor industry," adding, "We delivered improved operating margins, and made great progress with new products, new customers, and plans to expand our global production capacity."
NASDAQ: ACMR
Key Data Points
2024 promises more growth for ACM
Looking ahead to 2024, ACM expects revenue to reach $650 million to $725 million, which implies growth of 17% to 30% and compares to the consensus of $693 million.
The company looks well positioned to continue to benefit from the chip boom being sparked by AI demand, and the stock is well priced at a price-to-earnings ratio of 18.4 considering the growth opportunity in front of it.
Don't be surprised if the stock continues to climb given the recent momentum and the boom in AI chips.
