Electro Scientific Industries Stock Jumped Over 200% – Here’s Why

Electro Scientific Industries

The small-cap Electro Scientific Industries (NASDAQ:ESIO) is among the most prominent gainers in the last twelve months. The ESIO stock price rose 62% in the past six months and its share grew 229% in the previous year. An innovator of laser-based manufacturing solutions for the microtechnology industry impressed investors through stronger than expected growth in market share.

Stifel has upgraded ESI stock price target to $36 with a Buy rating, representing substantial upside from the current price of $21. The ESIO stock has the 52-week trading range of $6 to $27 – with the market capitalization of $724 million.

“Electro Scientific could stand to benefit from market trends that are boosting demand for flexible printed circuit boards as well as expansion into the growing HDI market,’ Stifel analyst said.

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The sales growth of 228% Y/Y in the latest quarter and record orders growth enhanced Stifel’s confidence on Electro Scientific stock. The company posted revenue of $110 million in the most recent quarter, compared to $33.8 million in the same period last year. GAAP net income was standing around $34.0 million from a net loss of $9.7 million one year ago.

Michael Burger, ESI’s president, and CEO stated, “We delivered another quarter of excellent financial results. Our non-GAAP gross margin rate of nearly 49% enabled adjusted operating margin of over 32% and adjusted quarterly earnings of nearly $1.00 per share.”

Bookings for Electro Scientific products tripled in the previous quarter; total orders jumped to $134.0 million, relative to $44.1 million in the past year period.

Higher backlog allowed the company to raise its revenues expectations to $110 million for the first quarter of FY2018, while Non-GAAP earnings per diluted share are expected to be around $0.95. “We believe the underlying technology trends for our products will drive long-term growth in our targeted markets, and our business model should translate the incremental revenue into leveraged earnings growth, CEO said”

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