{"id":87332,"date":"2023-11-22T01:39:45","date_gmt":"2023-11-22T06:39:45","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/mks-instruments-the-upcoming-analyst-day-could-shake-things-up-nasdaqmksi\/"},"modified":"2023-11-22T01:39:46","modified_gmt":"2023-11-22T06:39:46","slug":"mks-instruments-the-upcoming-analyst-day-could-shake-things-up-nasdaqmksi","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=87332","title":{"rendered":"MKS Instruments: The Upcoming Analyst Day Could Shake Things Up (NASDAQ:MKSI)"},"content":{"rendered":"
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MKS Instruments (NASDAQ:MKSI<\/span>) has slowed down in the last few days, but that does not take anything away from the powerful rally the stock went through in November. The stock went into a tailspin heading into the month of November, in part due to recent events in Israel, but the arrival of the Q3 FY2023 report on November 1 helped set off a rally after the stock hit a new 52-week low, along with some assistance elsewhere. However, the recent moves may be nothing more than a relief rally and more needs to happen for MKSI to get back to old highs. Why will be covered next?<\/span><\/p>\n

Why MKSI bounced in November after falling to a 52-week low<\/h2>\n

A previous article from September 8 rated MKSI a hold after observing how the stock had see-sawed pretty much all year. The stock found itself close to a trendline that had provided it with a measure of support in the preceding months, but the stock, being close to the trendline, was at risk of losing this support if the stock did not stop falling like it had in the preceding weeks.<\/span><\/p>\n

As it turned out, MKSI did fall below the trendline and with support out of the way the stock proceeded to decline for the next two months as shown in the chart below. The drop in the stock accelerated in early October after the violent events in Israel with the country home to a number of production facilities of MKSI.<\/p>\n

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\"MKSI<\/span>
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Source: Thinkorswim app<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

The stock continued to drop until it hit a new 52-week low of $63.44 on November 1 but then staged a rally, which saw the stock gain over 20% in November to bring down YTD losses to 8.7% with the stock priced at $77.35 as of November 20. This rally was assisted by a number of factors like the stock being heavily oversold after dropping for nearly three straight months, which cut the stock’s value by almost half.<\/p>\n

In addition, the situation in Israel has not escalated like some thought it might, at least thus far. MKSI itself has not been directly affected by events in Israel and operations have not been disrupted. However, the latest quarterly report also played a role, which is why the rally started on November 1 since the Q3 report was released on that day.<\/p>\n

The Q3 FY2023 report was not as bad as some might have thought after recent events<\/h2>\n

The Q3 report was actually a mixed bag, but MKSI did manage to blow past earnings estimates. Consensus estimates were looking for non-GAAP EPS of $1.02, but MKSI blew past estimates by earning $1.46 on revenue of $932M. In terms of GAAP, net income was $39M or $0.58 per share. Adjusted EBITDA was $235M, down QoQ and YoY.<\/p>\n

Note that the outsized GAAP loss of $1,769M or $26.47 per share in Q2 FY2023 was the result of an impairment charge of $1,827M due to weak industry conditions. Q3 FY2022 was also the first quarter with at least partial contributions from the Atotech acquisition. Keep in mind Q3 FY2023 benefited from revenue that got pushed out due to the ransomware event from earlier in the year. If not for this, Q3 revenue would have been about $30M less. The table below shows the numbers for Q3 FY2023.<\/p>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

(GAAP)<\/p>\n<\/td>\n

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Q3 FY2023<\/p>\n<\/td>\n

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Q2 FY2023<\/p>\n<\/td>\n

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Q3 FY2022<\/p>\n<\/td>\n

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QoQ<\/p>\n<\/td>\n

\n

YoY<\/p>\n<\/td>\n<\/tr>\n

\n

Revenue<\/p>\n<\/td>\n

\n

$932M<\/p>\n<\/td>\n

\n

$1,003M<\/p>\n<\/td>\n

\n

$954M<\/p>\n<\/td>\n

\n

(7.08%)<\/p>\n<\/td>\n

\n

(2.31%)<\/p>\n<\/td>\n<\/tr>\n

\n

Gross margin<\/p>\n<\/td>\n

\n

45.7%<\/p>\n<\/td>\n

\n

46.9%<\/p>\n<\/td>\n

\n

40.8%<\/p>\n<\/td>\n

\n

(120bps)<\/p>\n<\/td>\n

\n

490bps<\/p>\n<\/td>\n<\/tr>\n

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Operating margin<\/p>\n<\/td>\n

\n

12.6%<\/p>\n<\/td>\n

\n

(169.1%)<\/p>\n<\/td>\n

\n

12.4%<\/p>\n<\/td>\n

\n

18170bps<\/p>\n<\/td>\n

\n

20bps<\/p>\n<\/td>\n<\/tr>\n

\n

Income (loss) from operations<\/p>\n<\/td>\n

\n

$118M<\/p>\n<\/td>\n

\n

($1,696M)<\/p>\n<\/td>\n

\n

$118M<\/p>\n<\/td>\n

\n

–<\/p>\n<\/td>\n

\n

–<\/p>\n<\/td>\n<\/tr>\n

\n

Net income (loss)<\/p>\n<\/td>\n

\n

$39M<\/p>\n<\/td>\n

\n

($1,769M)<\/p>\n<\/td>\n

\n

$6M<\/p>\n<\/td>\n

\n

–<\/p>\n<\/td>\n

\n

550.00%<\/p>\n<\/td>\n<\/tr>\n

\n

EPS<\/p>\n<\/td>\n

\n

$0.58<\/p>\n<\/td>\n

\n

($26.47)<\/p>\n<\/td>\n

\n

$0.09<\/p>\n<\/td>\n

\n

–<\/p>\n<\/td>\n

\n

544.44%<\/p>\n<\/td>\n<\/tr>\n

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Weighted-average shares outstanding<\/p>\n<\/td>\n

\n

67.1M<\/p>\n<\/td>\n

\n

66.8M<\/p>\n<\/td>\n

\n

61.1M<\/p>\n<\/td>\n

\n

0.45%<\/p>\n<\/td>\n

\n

9.82%<\/p>\n<\/td>\n<\/tr>\n

\n

(Non-GAAP)<\/p>\n<\/td>\n

 <\/td>\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n
\n

Revenue<\/p>\n<\/td>\n

\n

$932M<\/p>\n<\/td>\n

\n

$1,003M<\/p>\n<\/td>\n

\n

$954M<\/p>\n<\/td>\n

\n

(7.08%)<\/p>\n<\/td>\n

\n

(2.31%)<\/p>\n<\/td>\n<\/tr>\n

\n

Gross margin<\/p>\n<\/td>\n

\n

47.1%<\/p>\n<\/td>\n

\n

46.9%<\/p>\n<\/td>\n

\n

44.9%<\/p>\n<\/td>\n

\n

20bps<\/p>\n<\/td>\n

\n

220bps<\/p>\n<\/td>\n<\/tr>\n

\n

Operating margin<\/p>\n<\/td>\n

\n

21.8%<\/p>\n<\/td>\n

\n

22.6%<\/p>\n<\/td>\n

\n

25.1%<\/p>\n<\/td>\n

\n

(80bps)<\/p>\n<\/td>\n

\n

(330bps)<\/p>\n<\/td>\n<\/tr>\n

\n

Income from operations<\/p>\n<\/td>\n

\n

$203M<\/p>\n<\/td>\n

\n

$227M<\/p>\n<\/td>\n

\n

$240M<\/p>\n<\/td>\n

\n

(10.57%)<\/p>\n<\/td>\n

\n

(15.42%)<\/p>\n<\/td>\n<\/tr>\n

\n

Net income<\/p>\n<\/td>\n

\n

$98M<\/p>\n<\/td>\n

\n

$88M<\/p>\n<\/td>\n

\n

$167M<\/p>\n<\/td>\n

\n

11.36%<\/p>\n<\/td>\n

\n

(41.32%)<\/p>\n<\/td>\n<\/tr>\n

\n

EPS<\/p>\n<\/td>\n

\n

$1.46<\/p>\n<\/td>\n

\n

$1.32<\/p>\n<\/td>\n

\n

$2.74<\/p>\n<\/td>\n

\n

10.61%<\/p>\n<\/td>\n

\n

(46.72%)<\/p>\n<\/td>\n<\/tr>\n

\n

Adjusted EBITDA<\/p>\n<\/td>\n

\n

$235M<\/p>\n<\/td>\n

\n

$254M<\/p>\n<\/td>\n

\n

$268M<\/p>\n<\/td>\n

\n

(7.48%)<\/p>\n<\/td>\n

\n

(12.31%)<\/p>\n<\/td>\n<\/tr>\n

\n

Weighted-average shares outstanding<\/p>\n<\/td>\n

\n

67.1M<\/p>\n<\/td>\n

\n

67.0M<\/p>\n<\/td>\n

\n

61.1M<\/p>\n<\/td>\n

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0.15%<\/p>\n<\/td>\n

\n

9.82%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

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