Episode Details

Photronics (PLAB) Q3 FY2026 — Shares rose 3.2% to $30.25 on the print, then slid to $27.73 by Friday's close. Adjusted EPS beat a cut bar by 24% - but the venture partners took $15.0M of the $43.9M consolidated profit, and $503.5M of the $672.8M cash sits inside those ventures. THE CALL: BEARISH (3/5, MODERATE) — base-case value ~$23.56 vs ~$27.73 today. KEY METRICS: - Revenue $216.0M, +2.7% YoY and +2.9% sequentially, vs $208.8M consensus - Non-GAAP diluted EPS $0.50 vs a $0.40 bar (+24%) - but $0.51 a year ago - GAAP net income to PLAB $28.9M / $0.49 of $43.9M consolidated - Non-controlling interests took $15.0M, 34% of consolidated net income - Operating profit $45.5M, -5.5% YoY; operating margin 21.1% vs 22.9% - IC revenue $154.7M (+5%); FPD $61.4M (-2%); high-end IC mix a record 44% - Cash and short-term investments $672.8M; $503.5M sits in the 50.01% JVs - Operating cash flow $76.3M; capex $37.0M in the quarter, $130.4M in nine months - Q4 FY26 guide: revenue $207-227M, operating margin 19-24%, EPS $0.40-0.56 - Our fair value ~$23.56 vs $27.73; three dated Street targets $42-55, median $45 What to watch: one cash distribution out of the joint ventures, or capital spending back under $121M a year, would break our thesis Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.