Photronics (PLAB) Stock Continues Downtrend Despite Double Analyst Upgrade

Photronics, Inc. (NASDAQ:PLAB) is one of the 10 Most Undervalued Semiconductor Stocks to Invest in. Photronics Inc. (NASDAQ:PLAB) boasts significant upside after a strong earnings report and back-to-back analyst upgrades. On December 11, D.A. Davidson analyst Thomas Diffely maintained his Buy rating on the stock and raised the price target from $30 to $45. On the same day, Christian Schwab of Craig-Hallum also assigned a price target of $42, along with a Buy rating.

These earnings came as the company continued to ride strong momentum in the last month, resulting in an incredible rally that saw the stock price double in less than a month. On the earnings call, Christian Schwab inquired about the pricing pressure in China. Management replied that it prioritizes its capacity for higher value customers, so if one product faces margin pressure, another is prioritized for production. At the moment, 22nm and 28nm technologies are considered higher-margin and therefore prioritized. Management also confirmed to the analyst that it expects gross margins to stay steady in the near term as it continues to make new investments.

When asked about tariffs and other geopolitical issues, the company mentioned that customers have now become used to supply chain disruptions as a result of these factors and therefore factor them in when placing orders, resulting in improved planning that doesn’t hurt the company as it did before.

Photronics, Inc. (NASDAQ: PLAB) manufactures semiconductor chips. It provides photomasks containing microscopic images of the circuits printed on these chips. The company is based in Connecticut, United States.

While we acknowledge the potential of PLAB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.