Aixtron stock responded to the presentation of its business figures last week with a 20% drop. Although the technology company showed a significant increase in revenue and earnings, investors had apparently expected more from the outlook. This brings the share price to roughly the same level as it was 12 months ago. According to insiders in the company, this could be a promising entry point.

Aixtron – Specialized machine manufacturer for the semiconductor industry Before I delve into the current numbers, I would like to introduce you to the company’s business model: Aixtron is a leading provider of deposition systems for the semiconductor industry. The company was founded in 1983 and is headquartered in Herzogenrath, with branches and representatives in Asia, the United States, and Europe. The company’s products are used worldwide by a wide range of customers to manufacture high-performance components for electronic and optoelectronic applications based on compound or organic semiconductor materials.

These components are used in display technology, signal and lighting technology, fiber optic communication networks, wireless and mobile telephony applications, optical and electronic data storage, LEDs, photovoltaics, and a range of other high-tech applications.

Revenue jumps 17% in the fourth quarter A first look at the figures shows that Aixtron continues to be on a growth path but is losing momentum: In the fourth quarter, revenue jumped 17% to 214.2 million euros. By comparison, in the third quarter, revenue increased by 86%. In the full fiscal year 2023, Aixtron recorded revenues of 629.9 million euros – an increase of 36%.

Aixtron increases spending on research and development At the bottom line, the fourth quarter saw a profit of 61.7 million euros (+23%). In the full year, Aixtron achieved a 45% increase to 145.2 million euros. Earnings per share improved from 89 cents to 1.29 euros. It should be noted that Aixtron significantly increased its spending on research and development in 2023. 87.7 million euros were invested, significantly more than the previous year (57.7 million euros).

In the fourth quarter, the groundbreaking ceremony for the construction of an innovation center in Herzogenrath took place, which is expected to cost a total of around 100 million euros.

Outlook causes investors to hit the sell button For the current fiscal year, Aixtron’s management expects revenues between 630 and 720 million euros. This corresponds to a maximum growth of 14% (vs. 36% in 2023). The slowing momentum is also likely due to the downturn in the electric car market – an important market for Aixtron.

However, for the following year 2025, management expects stronger growth. The company attributes this to the next wave of growth in the power electronics sector. For the operating profit margin before taxes and interest (EBIT), Aixtron is expecting a range between 24 and 26%, which is roughly in line with the previous year (2023: 24.9%).

Company insiders buy shares While investors showed more skepticism after the numbers were released, insiders are brimming with confidence. Board member Dr. Christian Danninger purchased shares worth 52,504 euros at 26.25 euros. In addition, board member Dr. Felix Grawert also bought shares worth 135,519 euros at 27.10 euros.

Whether these purchases will turn out to be good timing remains to be seen. Currently, Aixtron’s market value is 3.2 billion euros. Analysts expect earnings of 1.34 euros per share in 2024. This means that the stock is currently trading at 21 times the expected earnings for this year.