Business Description
Photronics, Inc., including its affiliated entities, operates as a global supplier focused on the production and distribution of photomask goods and associated services. The company's reach extends across the United States, Taiwan, Korea, Europe, and China, serving international markets. These photomasks are vital for the manufacturing of integrated circuits (ICs) and flat panel displays (FPDs), enabling the precise transfer of circuit patterns onto semiconductor wafers, FPD substrates, and various other electrical and optical components. Photronics markets its offerings to a broad customer base, encompassing semiconductor and FPD manufacturers, designers, foundries, and other producers of high-performance electronics, facilitated by its sales personnel and customer service representatives. Founded in 1969, the company was originally known as Photronic Labs, Inc., changing to Photronics, Inc. in 1990. Its principal office is situated in Brookfield, Connecticut.
Business History
Generated: Jun 11, 2026 3:02amPrice Overview
Last updated: Jun 11, 2026 3:00am (1d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.29
Total Equity: $1.17B
Shares: 59,920,000
Total Debt: $3.97M
Cash: $492.26M
EBITDA: $286.01M
Total Debt: $3.97M
Cash: $492.26M
Revenue: $849.29M
Revenue: $849.29M
Revenue: $849.29M
Total Equity: $1.17B
Tax Rate: 14.2%
Equity: $1.17B
Total Debt: $3.97M
Cash: $492.26M
Current Liabilities: $165.87M
Long-Term Debt: $3.96M
Total Debt: $3.97M
Total Equity: $1.17B
Shares: 59,920,000
Shares: 59,920,000
CapEx: -$188.14M
Shares: 59,920,000
Stock Price: $28.63
Net Income: $136.41M
Industry Benchmarks
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 11, 2026 3:02am (1d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $663.8M | $824.5M | $892.1M | $866.9M | $849.3M |
| Cost of Revenue | $496.7M | $530.3M | $555.9M | $551.0M | $549.5M |
| Gross Profit | $167.0M | $294.2M | $336.2M | $315.9M | $299.8M |
| Operating Expenses | $72.5M | $82.3M | $83.1M | $94.4M | $91.4M |
| Operating Income | $94.6M | $211.9M | $253.1M | $221.5M | $208.4M |
| Net Income | $55.4M | $118.8M | $125.5M | $130.7M | $136.4M |
| EBITDA | $194.1M | $321.2M | $351.2M | $330.6M | $286.0M |
| EPS | $0.90 | $1.96 | $2.05 | $2.12 | $2.29 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 11, 2026 3:02am (1d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $276.7M | $319.7M | $499.3M | $598.5M | $492.3M |
| Total Current Assets | $550.6M | $644.7M | $785.5M | $931.1M | $890.1M |
| Total Assets | $1.3B | $1.3B | $1.5B | $1.7B | $1.8B |
| Current Liabilities | $176.1M | $193.8M | $185.2M | $183.8M | $165.9M |
| Long-Term Debt | $58.4M | $7.7M | $4.2M | $25,000 | $4.0M |
| Total Liabilities | $293.6M | $253.7M | $250.6M | $231.3M | $207.2M |
| Total Equity | $823.7M | $831.5M | $975.0M | $1.1B | $1.2B |
| Retained Earnings | $317.8M | $435.6M | $561.1M | $691.8M | $772.2M |
Cash Flow (Annual)
Last updated: Jun 11, 2026 3:02am (1d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $150.8M | $275.2M | $302.2M | $261.4M | $247.8M |
| Capital Expenditure | -$109.3M | -$112.3M | -$131.3M | -$130.9M | -$188.1M |
| Free Cash Flow | $41.5M | $162.8M | $170.9M | $130.5M | $59.7M |
| Acquisitions (net) | $0 | $25.0M | $0 | $0 | $0 |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$48.2M | -$2.5M | $0 | $0 | -$97.4M |
| Net Change in Cash | -$1.9M | $42.7M | $179.5M | $99.4M | -$106.1M |
Analyst Estimates (Annual)
Last updated: Jun 11, 2026 3:00am (1d ago)| Metric | 2024 | 2025 | 2026 | 2027 |
|---|---|---|---|---|
| Revenue |
$940.0M $938.6M – $941.4M
|
$838.7M $837.5M – $840.0M
|
$869.6M $868.3M – $870.9M
|
$909.3M $907.9M – $910.6M
|
| EBITDA |
$351.7M $351.2M – $352.2M
|
$313.8M $313.3M – $314.2M
|
$325.3M $324.9M – $325.8M
|
$340.2M $339.7M – $340.7M
|
| Net Income |
$124.6M $124.4M – $124.9M
|
$112.4M $111.5M – $113.2M
|
$120.6M $120.4M – $120.9M
|
$131.6M $131.4M – $131.9M
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 11, 2026 3:02am (1d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +24.2% | +8.2% | -2.8% | -2.0% |
| Gross Profit Growth | +76.1% | +14.3% | -6.0% | -5.1% |
| Operating Income Growth | +124.1% | +19.4% | -12.5% | -5.9% |
| Net Income Growth | +114.2% | +5.6% | +4.1% | +4.4% |
| EBITDA Growth | +65.5% | +9.3% | -5.9% | -13.5% |
Insider Trading (Recent)
Last updated: Jun 11, 2026 3:02am (1d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-04-17 | ZHANG RUI | S-Sale | 4,556.00 | $46.70 | $212,765 |
| 2026-04-17 | Paladino Mary | D-Return | 22,548.00 | $47.77 | $1.1M |
| 2026-04-16 | Lee Kang Jyh | S-Sale | 10,000.00 | $46.05 | $460,500 |
| 2026-04-16 | Lee Kang Jyh | S-Sale | 10,000.00 | $45.80 | $458,000 |
| 2026-04-15 | Lee Kang Jyh | S-Sale | 10,000.00 | $45.10 | $451,000 |
| 2026-04-14 | Wang Hsueh-Chun | S-Sale | 19,250.00 | $45.30 | $872,025 |
| 2026-04-13 | TYSON MITCHELL G | A-Award | 3,722.00 | $0.00 | $0 |
| 2026-04-13 | Garcia David A. | A-Award | 3,722.00 | $0.00 | $0 |
| 2026-04-13 | Almeida Michelle | A-Award | 3,722.00 | $0.00 | $0 |
| 2026-04-13 | Liao Daniel JL | A-Award | 3,722.00 | $0.00 | $0 |
| 2026-04-13 | LEWIS ADAM M | A-Award | 3,722.00 | $0.00 | $0 |
| 2026-04-13 | MACRICOSTAS CONSTANTINE S | A-Award | 3,722.00 | $0.00 | $0 |
| 2026-04-13 | Lee Kang Jyh | M-Exempt | 5,000.00 | $8.60 | $43,000 |
| 2026-04-13 | Lee Kang Jyh | S-Sale | 5,000.00 | $45.00 | $225,000 |
| 2026-04-13 | Lee Kang Jyh | M-Exempt | 5,000.00 | $8.60 | $43,000 |
| 2026-04-13 | Rivera Eric | M-Exempt | 1,000.00 | $9.78 | $9,780 |
| 2026-04-13 | Rivera Eric | S-Sale | 1,000.00 | $44.77 | $44,770 |
| 2026-04-13 | Rivera Eric | M-Exempt | 1,000.00 | $9.78 | $9,780 |
| 2026-04-14 | MACRICOSTAS CONSTANTINE S | S-Sale | 50,000.00 | $45.35 | $2.3M |
| 2026-04-01 | MACRICOSTAS CONSTANTINE S | G-Gift | 13,000.00 | $0.00 | $0 |
Narrative Economics
Delvantic AI Findings
Looking at the raw numbers first: PLAB's quarterly revenue is flat-to-down — $211M, $210M, $216M, $225M, $210M over the last five quarters with no clear acceleration despite what "Revenue Confidence" claims. Annual revenue has declined three years running: $892M (FY23) → $867M (FY24) → $849M (FY25), a -2.4% CAGR. More concerning, operating income peaked at $253M in FY23 and fell to $208M in FY25 — that's an 18% drop while revenue only fell 5%, meaning operating leverage is working in reverse. Net margins on the most recent quarter (15%) are well below the FY23 average. The FY25 NI of $136M flatters reality because Q1'26 (Feb) and Q4'25 (Oct) both had unusually high margins (19-29%) that look tax/one-time aided versus the messier 4-11% prints in mid-2025.
The free cash flow story is where the synthesis verdict gets shaky. FCF collapsed from ~$100M+ historically to $59.7M in FY25, with capex of $188M against $248M OCF. The FCF CAGR of -40.9% is the single most important number in this file and the synthesis model glosses over it. At $1.69B market cap, that's a 3.5% FCF yield — not the bargain the 10.4x P/E suggests. The cash hoard of $492M is real and explains the EV/EBITDA of 5.0x looking cheap, but if capex stays elevated (advanced-node photomask tooling is expensive and ongoing), normalized FCF may not recover. The "no-debt, 5.4x current ratio, $492M cash" picture is genuinely strong, but cash that funds capex to defend a shrinking revenue base isn't shareholder value — it's maintenance.
On the prior models: the Valuation Synthesis ($32.59 fair value, +14% upside) and Market Forces ("value trap, structural share loss") are in direct contradiction, and I side with Market Forces directionally though not on severity. The synthesis is doing a DCF on numbers that include the FY23 peak, which biases fair value high. The pre-flight note about Asian competition (DNP, Toppan dominate leading-edge masks) is the real bear case and it's underweighted everywhere else. The Narrative layer calling this "anchored, steady-compounder" is wrong — you can't be a compounder with -2.4% revenue CAGR and -41% FCF CAGR. That's a melting ice cube with a strong balance sheet, not a compounder. The insider selling cluster in mid-April 2026 (4 sales totaling ~54K shares in four days, against routine awards) is a soft negative — not a smoking gun at this scale, but management isn't accumulating either.
The contrarian case worth taking seriously: PLAB is a duopoly-adjacent supplier (with Toppan/DNP) in a market with brutal barriers to entry, trading at 1.2x book with $492M cash (29% of market cap) and zero debt. If photomask demand from mature-node IC and FPD stabilizes — and mature nodes are sticky because automotive/industrial chips don't migrate — then $200M+ of operating income on a $1.2B EV is genuinely cheap. The bull needs to believe FY25 FCF was a capex-cycle trough, not a new normal. That's testable: watch FY26 capex guidance. If capex falls back to $100-120M, FCF doubles to ~$130M and the stock is a buy at $28. If capex stays at $180M+ to chase advanced nodes where they can't win, this is dead money.
My verdict: the synthesis is too optimistic anchoring to $32.59. The Market Forces "value trap" call is closer to right but overstates structural decline — PLAB still earns 24.5% operating margins, which a truly losing supplier cannot. Fair value is closer to $26-30 based on a 6% normalized FCF yield on $100M mid-cycle FCF plus net cash. At $28.63, you're paying roughly fair value with optionality on a capex normalization, not getting a 14% discount. The accelerating quarterly trend the secondary signals claim simply isn't in the data. I dissent from the slight_upside verdict and land at fairly_valued with a negative skew given the FCF trajectory and insider selling.
GPT Critique
Upon reviewing the raw data, Photronics, Inc. (PLAB) presents a mixed financial picture. Quarterly revenues exhibit stagnation, oscillating around the $210M mark with no significant upward trend. Despite a current operating cash flow of $247.8M, the free cash flow of $59.7M is concerning, especially with a hefty $188.1M capex. This indicates that while the company maintains solid operational cash generation, heavy investments are required to sustain its business. The financial health is underpinned by a robust cash position of $492.3M and no debt, a significant buffer for the capital-intensive semiconductor industry. However, the revenue CAGR of -2.4% and FCF CAGR of -40.9% suggest a declining growth trajectory, challenging the notion of PLAB as a growth stock.
Regarding specific claims by Claude Opus, I agree with the assertion that the flat-to-declining revenue trend is problematic, particularly in a sector where growth is typically prized. Opus highlights the decline in operating income from $253M in FY23 to $208M in FY25, emphasizing the negative operating leverage — a point I concur with, as it indicates cost pressures or inefficiencies. However, I diverge on the point where Opus suggests the -41% FCF CAGR is the most critical metric overlooked by the synthesis model. While significant, the cash flow anomaly might be more attributable to the cyclical nature of capex in semiconductor equipment, potentially normalizing in future periods if strategic adjustments are made.
I also partially disagree with Opus's view on the synthesis model's valuation. While Opus critiques the model for being too optimistic with a fair value of $32.59, I find merit in the argument that the valuation considers historical peaks. However, I believe the valuation isn't entirely dismissive, given the company's strong cash position and zero debt, which provide a substantial margin of safety. The insider selling activity noted by Opus does raise red flags about management's confidence, but such transactions aren't always indicative of long-term business prospects.
A careful skeptic might argue that both our analyses overemphasize short-term cash flow fluctuations without considering potential technological advancements or strategic shifts that could alter future capex requirements. They might suggest that the company’s entrenched position in a niche market with high entry barriers could provide long-term stability, undervalued in both our assessments.
Advanced Analysis Forensic deep-dive · two lenses
Reconciling the two: quality at 58 (Strong) tells me this is a real business — net cash equal to 35% of the cap, clean accruals, OCF/NI of 2.25x, shrinking share count. I'm happy to own it. But value at 25 (Modestly Cheap) tells me the market already knows, and the 14% gap to a $33 EPV floor is thin for a cyclical whose FCF just dropped two-thirds and whose insiders are net sellers 51-to-0. That's not a fat pitch, it's a fair price for a fair business. The play is a small starter position here (maybe 25-33% of intended full size) just to have skin in the game and a reason to keep the file open, with the bulk of the powder reserved for sub-$26.50 — roughly a 20%+ discount to EPV — which is where I'd actually back up the truck to a full position. Above $31 I stop adding entirely; above $34 I'd trim.
What flips me aggressive earlier: the next 10-Q showing FCF re-accelerating (proving the collapse was capex timing, not structural demand erosion) or a clear chipmaker capex cycle turn. What flips me to the sidelines: a third straight year of revenue decline, gross margin breaking below 34%, or insider selling intensifying. Net-net: I respect the quality, I respect the EPV floor with a net-cash kicker underneath, but at $28.63 I'm paid to wait, not to chase. Nibble, don't gorge.
Photronics looks like a genuinely well-run mature earner. Net cash of $584M against a $1.69B cap (35% of market cap) plus a self-funding $60M FCF base means survival risk is essentially zero, and the Altman Z of 6.82 confirms it. Earnings quality is pristine: accruals at -8.9% of assets, OCF/NI of 2.25x, and a Beneish M of -2.45 say reported profits are backed by real cash. On top of that, share count is actually shrinking (-0.9% CAGR) with buybacks running 3.2x SBC — per-share value is being concentrated, not eroded.
That said, the operating trajectory has plateaued and is mildly deteriorating. Revenue peaked in 2023 at $892M and has slipped two years running to $849M (-4.8% from peak). Gross margin compressed from 37.7% → 35.3% and operating margin from 28.4% → 24.5% over the same window. Net income still grew to $136M (a positive — likely buybacks/tax/interest income on the cash pile helping), but FCF collapsed from $171M (2023) to $60M (2025), a 65% drop. That FCF compression is the single most important quality concern — it implies either heavy capex reinvestment or a working-capital drag that needs explanation.
Insider activity is mixed-to-cautionary: 51 sells / 0 buys over 12 months ($25M sold), with the most recent tape showing repeated programmatic selling by Lee Kang Jyh and others. No open-market buys at all. Not damning for a mature earner where comp is largely equity, but the complete absence of conviction buying is worth noting.
Verify before trusting this (6)
- Root cause of FCF dropping from $171M to $60M — is it capex expansion (e.g., new mask shop / advanced node investment) or working-capital deterioration?
- Customer concentration in the 10-K — photomask demand is concentrated among a few foundries/IDMs; any single customer >10%?
- Capex guidance and whether the elevated capex cycle continues or normalizes
- Minority interest detail — Photronics has JVs (IM Technology in Taiwan, PDMCX in China); how much of net income is attributable to non-controlling interests?
- Geographic/segment mix — how much revenue is China-exposed and at what margin?
- Pricing power evidence — is the 35% GM defensible if leading-edge demand weakens?
The composite fair value of $33.02 (signal-adjusted $32.59) sits ~14-15% above the $28.63 quote, and notably the FV is pinned to an EPV floor — i.e., it's valuing the business on current earning power with essentially no growth credit. That's a reasonable anchor for a cyclical photomask supplier whose revenue and FCF have rolled over. Earnings quality is high (score 3, no haircut warranted), so the deserved-value math doesn't need a discount for accruals or dilution.
The quality lens grades the business Strong (58) with a fortress balance sheet and net cash, which argues the deserved value should at least equal — not sit below — EPV. So $33 is a defensible floor, not a stretch. Against $28.63, that's a modest margin of safety, consistent with the market pricing in the FCF rollover and cyclical risk the bear case flags. This isn't priced for perfection, but it isn't a giveaway either — it looks like a fair-to-modestly-cheap setup where you're paid a little to wait, with optionality if the cycle turns.
Verify before trusting this (4)
- Cause of the ~two-thirds single-year FCF decline — working capital, capex timing, or genuine demand drop?
- Management commentary on mask volumes at advanced nodes and pricing trends with top customers
- Capex guidance vs maintenance capex — is EPV being understated by elevated growth capex?
- Buyback pace and any change to capital return policy given the cash pile