Kulicke & Soffa (KLIC) AI Stock Analysis

• Market Cap: $1.61B
• Dividend Yield: 2.69%
• Average Volume (3M): 707.31K
• Price to Earnings (P/E): 254.2
• Beta (1Y): 1.45
• Revenue Growth: -4.92%
• EPS Growth: -85.39%
• Country: US
• Employees: 2,702
• Sector: Technology
• Sector Strength: 46
• Industry: Semiconductors
• EPS (TTM): 0.12
• Shares Outstanding: 53,383,167
• 10 Day Avg. Volume: 823,967
• 30 Day Avg. Volume: 707,306
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.72
• Price to Cash Flow (P/CF): 25.30
• P/FCF Ratio: 54.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $48.75
• Price Target Upside: 59.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

Kulicke & Soffa's stock score reflects a mix of financial challenges and potential recovery opportunities. The company's strong balance sheet and cash flow resilience are offset by declining revenues and profitability. Technical indicators suggest bearish momentum, while the high P/E ratio indicates overvaluation. Optimism from the earnings call and share repurchase programs provides some positive outlook, but the cessation of the EA equipment business adds a negative impact.

Positive Factors

Business Development

First dual-head Fluxless Thermo-Compression (FTC) system shipped expanding SAM opportunity in foundry/logic and potentially expanding into HBM as a lower cost option to hybrid bonding given 2x throughput improvement over the single-head FTC design.

Earnings

KLIC reported F1Q25 results with revenue largely in line with the Street; NG GM of 52.7% and NG EPS of $0.37 came in above the consensus estimates.

Shareholder Returns

New $300M share repurchase authorization is a positive and total buyback capacity is ~$330M entering the Dec Q.

Negative Factors

Financial Outlook

Soft F1Q outlook despite improving end markets, with revenue guidance well below the Street view.

Market Demand

Tepid demand for core ball bonders and wedge bonders with uncertain timing and slope of recovery.

Revenue Guidance

Management guided 2Q25 flat Q/Q, slightly below the Street estimates, as the mainstream business continues to bounce along the bottom.

Kulicke & Soffa Business Overview & Revenue Model

Company Description

Kulicke and Soffa Industries, Inc. designs, manufactures, and sells capital equipment and tools used to assemble semiconductor devices. It operates through two segments, Capital Equipment, and Aftermarket Products and Services (APS). The company manufactures and sells advanced displays; die-transfer, flip-chip, and TCB advanced packaging products; ball bonder, die-attach, electronics assembly, lithography, wafer-level bonder, and wedge bonder products; consumables, such as capillaries, dicing blades, and wedge bonds; and auto offline programming, KNet PLUS, and new product introduction/manufacturing execution system software products. It also services, maintains, repairs, and upgrades equipment. The company serves semiconductor device manufacturers, integrated device manufacturers, outsourced semiconductor assembly and test providers, other electronics manufacturers, industrial manufacturers, and automotive electronics suppliers primarily in the United States and the Asia/Pacific region. Kulicke and Soffa Industries, Inc. was founded in 1951 and is headquartered in Singapore.

How the Company Makes Money

Kulicke & Soffa generates revenue primarily through the sale of its semiconductor and electronic assembly equipment. The company earns money by selling capital equipment, tools, and consumables required for semiconductor manufacturing processes. Key revenue streams include sales of wire bonding equipment, advanced packaging solutions, and aftermarket products such as spares and services. Additionally, Kulicke & Soffa benefits from strategic partnerships and collaborations with semiconductor manufacturers and industry leaders, which enhance its market reach and drive sales growth. The company's earnings are also influenced by the demand for semiconductor devices, which affects the purchasing behavior of its customers in the electronics manufacturing sector.

Kulicke & Soffa Financial Statement Overview

Summary

Despite a challenging income statement with declining revenue and low net profit margin, Kulicke & Soffa maintains a robust balance sheet characterized by low leverage and a strong equity position. Cash flow metrics show improvement, indicating effective cash management amidst operational difficulties.

Income Statement

Kulicke & Soffa's income statement reveals a challenging period. The TTM (Trailing-Twelve-Months) Gross Profit Margin stands at 47.35%, which is quite robust. However, the Net Profit Margin is a mere 0.48%, indicating minimal profitability. Revenue has decreased notably from $1.5 billion in 2021 to $701 million in the TTM, reflecting a significant contraction in sales. The EBIT Margin is 5.69%, and EBITDA Margin is 3.64%, both showing a steep decline from past performance, suggesting operational challenges and cost management issues.

Balance Sheet

The balance sheet indicates a strong equity position with a Debt-to-Equity Ratio of 0.04, demonstrating low leverage. The Return on Equity (ROE) for the TTM is only 0.34%, highlighting low returns on shareholder investments. The Equity Ratio is 77.73%, reflecting a solid capital structure with most assets financed by equity. Despite low profitability, the company maintains a healthy financial position with ample cash reserves.

Cash Flow

Kulicke & Soffa's cash flow analysis shows a Free Cash Flow Growth Rate of 205.95%, indicating improved cash generation. The Operating Cash Flow to Net Income Ratio is 17.13 for the TTM, suggesting strong cash flow relative to net income. The Free Cash Flow to Net Income Ratio is 13.62, reflecting efficient cash usage. However, fluctuations in operating cash flows and investment cash outflows highlight potential volatility.

Breakdown
TTM	Sep 2024	Sep 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
701.17M	706.23M	742.49M	1.50B	1.52B	623.18M
	Gross Profit
331.95M	268.75M	358.65M	748.32M	696.99M	297.98M
	EBIT
39.90M	-92.50M	39.44M	470.07M	412.45M	58.51M
	EBITDA
36.90M	-33.53M	89.83M	492.71M	432.26M	78.25M
	Net Income Common Stockholders
3.34M	-69.01M	57.15M	433.55M	367.16M	52.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
181.10M	577.15M	759.40M	775.54M	739.79M	530.13M
	Total Assets
580.17M	1.24B	1.50B	1.59B	1.60B	1.05B
	Total Debt
98.47M	40.96M	48.41M	41.69M	42.99M	24.23M
	Net Debt
-79.64M	-186.18M	-480.99M	-513.84M	-319.80M	-163.90M
	Total Liabilities
257.69M	296.15M	325.22M	393.95M	506.39M	296.57M
	Stockholders Equity
322.48M	944.01M	1.17B	1.19B	1.10B	757.99M
Cash Flow		Free Cash Flow
35.35M	14.89M	129.00M	367.20M	277.26M	82.69M
	Operating Cash Flow
57.27M	31.04M	173.40M	390.19M	300.03M	94.41M
	Investing Cash Flow
4.08M	-138.50M	-91.34M	133.80M	-81.71M	-125.96M
	Financing Cash Flow
-206.43M	-196.10M	-111.88M	-321.19M	-44.26M	-145.81M

Kulicke & Soffa Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 30.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLIC, the sentiment is Negative. The current price of 30.62 is below the 20-day moving average (MA) of 30.97, below the 50-day MA of 35.31, and below the 200-day MA of 42.53, indicating a bearish trend. The MACD of -1.68 indicates Negative momentum. The RSI at 43.56 is Neutral, neither overbought nor oversold. The STOCH value of 50.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KLIC.

Kulicke & Soffa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACLS	67 Neutral	$1.45B	7.34	21.41%	―	-9.97%	-17.87%
FORM	66 Neutral	$1.97B	28.79	7.50%	―	15.16%	-15.16%
HIMX	63 Neutral	$1.09B	13.98	9.11%	4.39%	-4.43%	57.01%
Sector *	59 Neutral	$9.97B	10.09	-6.54%	3.08%	7.41%	-11.60%
KLIC	50 Neutral	$1.61B	254.22	0.31%	2.69%	-4.92%	-85.39%
VSH	49 Neutral	$1.52B	26.74	-1.47%	3.58%	-13.65%	-110.03%
COHU	48 Neutral	$685.07M	―	-7.73%	―	-36.86%	-351.11%

Kulicke & Soffa Corporate Events

Kulicke & Soffa Ceases EA Equipment Business

Kulicke & Soffa announced the cessation of its EA equipment business, which is expected to result in significant financial changes. The company anticipates a reduction in revenue by $25 million to $29 million, a decrease in gross profit by $7 million to $11 million, and a drop in operating expenses by $24 million to $28 million, impacting its long-term financial model.