When good news from a company, a small company in particular, runs up against a rising tide of negative sentiment, it’s almost always the tide that wins. Veeco Instruments (VECO) has been delivering, with beat-and-raise quarters, improving order/revenue outlooks, and improving margins, but the market is not rewarding the stock for it, and Veeco isn’t the only player in semi tools that’s been weak in recent months.
The market is going to do what the market is going to do, but I do believe the shares are undervalued below the mid-$20s. In addition to near-term opportunities in the core business, including more tool sales for advanced packaging, I see longer-term opportunities in memory and compound semiconductors. Moreover, I believe management is continuing to build credibility with its margin improvement efforts, and the upcoming virtual analyst day is an opportunity to provide some new multiyear targets.
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Veeco Instruments Leveraging Increased Demand Well, But The Market Doesn't Care
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