BofA maintains Camtek stock Buy rating, $80 price target

On Tuesday, BofA Securities expressed confidence in Camtek (NASDAQ:CAMT), maintaining a Buy rating and a price target of $80.00. The firm’s analysis followed Camtek’s first-quarter sales, which met expectations, and a profit per share that exceeded forecasts by 2% due to a gross margin (GM) surprise of 52%, compared to the consensus of 50.7%. The company’s strong financial position is evident in its latest metrics, with InvestingPro data showing a healthy current ratio of 5.0 and robust revenue growth of 36.1% over the last twelve months. Despite an uncertain macroeconomic environment, Camtek anticipates that customer investments in AI packaging will continue without significant changes, with high-performance computing (HPC) sales expected to remain at 45-50% of the mix through calendar year 2025 (CY25). According to InvestingPro analysis, the company’s financial health score is rated as "GREAT," with 8 analysts recently revising their earnings estimates upward. For investors seeking deeper insights, InvestingPro offers 12 additional valuable tips about Camtek’s performance and prospects.

However, BofA Securities adjusted its CY25 sales and profit per share estimates slightly downwards by 3% and 5% respectively, citing limited visibility beyond the next one to two quarters. The firm also noted potential variability in future shipments of tools for hybrid bond memory (HBM) and chiplets after two strong investment years.

The firm’s positive outlook is supported by several factors, including increasing traction for Camtek’s new Hawk and G5 tools, which are projected to make up a significant portion of sales in CY25. Additionally, potential upside from TSMC and Intel (NASDAQ:INTC) in the second half of the year was highlighted, with Intel’s risk considered fully mitigated despite its involvement in EMIB and Foveros roadmaps. The company’s strong execution is reflected in its impressive return on equity of 23% and a PEG ratio of 0.52, suggesting attractive valuation relative to growth prospects. BofA also observed that Camtek has not faced competitive pressures from KLA, unlike its peer Onto, and that Camtek is on track to gain market share in 2D inspection.

The first-quarter gross margin beat of approximately 130 basis points suggests there could be margin expansion in the second half of 2025 and into 2026, as new tools could help push margins towards the high end of Camtek’s 51-53% target range. BofA Securities has kept the price objective steady at $80, based on an unchanged 20x CY26 price-to-earnings ratio, which is deemed attractive relative to Camtek’s historical median of approximately 27x. For comprehensive analysis of Camtek’s valuation and growth prospects, investors can access the detailed Pro Research Report available exclusively on InvestingPro, which provides in-depth analysis of the company’s financial health, market position, and growth trajectory.

In other recent news, Camtek Ltd has announced the nomination of Lior Aviram as the new Executive Chairman of the Board, effective June 1, 2025, pending shareholder approval at the upcoming annual general meeting. Aviram brings over three decades of experience as a legal counsel for technology companies, with expertise in strategic transactions and corporate development. Rafi Amit, CEO of Camtek, expressed enthusiasm for Aviram’s nomination, highlighting his longstanding relationship with the company and deep understanding of its operations. The current Chairman, Moty Ben-Arie, will continue to serve as a non-executive member of the Board, subject to re-election. Camtek continues to serve critical segments of the semiconductor market, including Advanced Interconnect Packaging (NYSE:PKG) and Memory, with its inspection systems. These systems are essential in the production process of semiconductor devices. The company operates manufacturing facilities in Israel and Germany and maintains a global presence with eight offices worldwide. This announcement is based on a press release statement and includes forward-looking statements about Camtek’s business prospects.

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