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Camtek Ltd. (CAMT) Q2 2026 — Revenue $133.2M, a record, +8.0% y/y. Non-GAAP EPS $0.78 vs a $0.761 bar - but $0.79 a year ago. GAAP EPS $0.46 vs $0.69, -33%. Q3 guided $158-160M, +20% q/q. The 6-K landed 7:16am ET Aug 10, BEFORE the open: CAMT gapped to $169.94 (+9.4%), fell to $147.75 (-4.9%), closed $158.10, +1.77%. Camtek printed the biggest quarter in its history - $133.2 million of revenue - and guided September up 20% sequentially to $158-160 million. The stock opened up 9.4% and closed up 1.77%. Here is why: March-quarter operating income was $27.266 million and June-quarter operating income was $27.227 million. Camtek added $11.6 million of revenue and zero operating profit, and the $0.78 the market called a beat is a penny BELOW the $0.79 it earned a year ago on 8% less revenue. THE CALL: AVOID (3/5, A PRICE CALL, NOT A DEMAND CALL) — base-case value ~$126.0 vs ~$164.41 today. KEY METRICS: - CALL: AVOID 3/5, fair value $126.00 vs the $164.41 close on Aug 11 - 23.4% BELOW the price. Bull $168, base $126, bear $84, weighted 25/50/25. Street consensus is $177.11 (median $175, high $200, low $145) from nine analysts, so we are 28.9% below the Street and below even its $145 low. - THE ANGLE - RECORD REVENUE, ZERO EXTRA PROFIT: Q1 2026 GAAP operating income was $27.266M; Q2 2026 was $27.227M. Revenue between those quarters rose $11.584M and operating profit fell $39 THOUSAND. Gross profit rose $5.773M; operating expenses rose $5.812M - more than the profit they produced. - THE YEAR-ON-YEAR VERSION: revenue +8.0%, gross profit +6.5%, total operating expenses +28.8% - $2.16 of new cost for every $1.00 of new gross profit. R&D alone +45.4%, $11.474M to $16.684M. GAAP operating income -14.8% to $27.227M; GAAP diluted EPS $0.46 vs $0.69, -33.3%. - SIX STRAIGHT QUARTERS OF MARGIN DECLINE: GAAP operating margin ran 27.6% (Mar 25), 25.9%, 25.3%, 24.8%, 22.4%, 20.4% (Jun 26) - 720 basis points surrendered while revenue rose 12.3%. The company's own non-GAAP series has the same slope, 31.5% to 27.0%. - THE 'BEAT' IS A YEAR-ON-YEAR DECLINE: non-GAAP EPS $0.78 vs a $0.761 bar, but $0.79 a year ago on 8% LESS revenue - the Street bar was already 3.7% below last year's actual. Add-backs were $16.143M, 69.3% of GAAP net income, vs $5.143M and 15.3% a year ago: $7.700M unexplained 'one-time tax', $4.873M stock comp, $3.570M acquisition. - THE CASH: Q2 operating cash flow was just $12.2M on $23.3M of GAAP net income. Trade receivables went $90.829M (Dec 31) to $153.921M (Jun 30), +69.5%, DSO 65 to 105 days. Cash, deposits and securities fell $849.7M to $815.8M. No buyback, no dividend; diluted shares 49.327M to 51.520M, +4.4%. - THE HBM STORY IS CURRENTLY A CHINA STORY: 2025 revenue by destination was China $243.9M (49.2%, up from 30.9% in 2024) and Korea $36.9M (down 68.5% from $117.1M). China grew $111.4M while total revenue grew $66.8M. Asia Pacific is ~91% of sales; the largest customer was 11%. - VALUATION: 51.52M diluted shares at $164.41 = $8.47B, less $815.8M of cash = $7.65B EV. That is 13.0x 2026 revenue and 11.0x the 2027 consensus of $698M; 46.9x 2026 earnings and 36.3x the 2027 consensus of $4.52. Owner-earnings DCF gives $97; 30x 2027 EPS gives $136; 10x 2027 sales gives $151. What to watch: UP: orders year to date exceed $600M vs $496.1M of 2025 revenue, the H2 guide was RAISED to 'more than 30%', and at $159M on a flat $40M cost base operating margin snaps back to ~25% in one print. DOWN: GAAP operating margin has fallen six quarters, 27.6% to 20.4%, DSO went 65 to 105 days, and the price assumes 26.3% owner-earnings growth for five years. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.