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1. Company Snapshot

1.a. Company Description

5N Plus Inc.produces and sells semiconductors in North America, Europe, and Asia.It operates through Specialty Semiconductors and Performance Material segments.


The company offers low melting point alloys, semiconductor compounds and wafers, as well as various chemicals, and metals.It is also involved in manufacture of metallic powders for micro-electronic and manufacturing applications.In addition, the company is involved in animal feed additives and pharmaceutical ingredients as well as offers recycling services.


The company serves renewable energy, security, space, pharmaceutical, medical imaging, manufacturing, electronic, consumer, and industrial applications.5N Plus Inc.is headquartered in Montreal, Canada.

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1.b. Last Insights on VNP

The recent 3-month performance of 5N Plus Inc. was negatively impacted by a 28% decline in share price, despite reporting a record Q4 2024 with significant revenue and EBITDA growth. The company's ability to navigate trade uncertainties and expand capacity in key sectors was overshadowed by a lackluster earnings release, which failed to meet market expectations. Additionally, the company's decision to partner with ALLOS to commercialize its GaN Power Electronics IP Portfolio may not have been enough to offset the negative sentiment surrounding the company's financial performance.

1.c. Company Highlights

2. 5N Plus Shines with Record Quarterly Revenue and Margin Expansion

5N Plus Inc. reported its strongest quarterly revenue in a decade, with Q3 revenue surging by 33% to $104.9 million, and year-to-date revenue reaching $289.1 million. The company's adjusted gross margin reached a record 36.9% of sales, with an adjusted gross margin of $38.7 million, up 58% year-over-year. Adjusted EBITDA increased by 86% to a record $29.1 million in Q3 and grew to $74 million year-to-date, an 81% increase compared to the same period last year. The company's actual EPS came out at $0.2786, significantly beating estimates of $0.09.

Publication Date: Nov -24

📋 Highlights
  • Record Q3 Revenue:: 33% growth to $104.9M, highest in a decade; year-to-date revenue hits $289.1M.
  • Adjusted Gross Margin Peak:: 36.9% of sales ($38.7M), up 58% YoY, driven by improved pricing and cost controls.
  • Adjusted EBITDA Surge:: Q3 record of $29.1M (+86% YoY); YTD reaches $74M, an 81% increase.
  • Segment Performance:: Specialty Semiconductors EBITDA jumps 120% to $19.2M; Performance Materials achieves 53.1% gross margin.
  • 2025 Guidance Raised:: Adjusted EBITDA now projected at $85–90M; strong backlog (311 days) and net debt/EBITDA of 0.74x support growth.

Segment Performance

The Specialty Semiconductors segment saw revenue increase to $75.2 million, with adjusted gross margin at 30.8% of sales and adjusted EBITDA up 120% to $19.2 million. The Performance Materials segment reported a record adjusted gross margin of 53.1% of sales, with adjusted EBITDA up 39% to $13.3 million. The strong performance across both segments was a key driver of the company's overall growth.

Guidance and Leadership Transition

The company has increased its adjusted EBITDA guidance for 2025 to a range of $85 million to $90 million, reflecting its confidence in continued growth. The leadership transition, with Gervais Jacques becoming Executive Chair and Richard Perron taking over as President and CEO, is expected to drive the company's future growth initiatives. The company's backlog is at 311 days of annualized revenue, with a net debt-to-EBITDA ratio of 0.74x, indicating a strong balance sheet to pursue acquisitions and investments.

Valuation and Growth Prospects

With a P/E Ratio of 36.11 and an EV/EBITDA of 18.39, the market is pricing in a certain level of growth for 5N Plus. Analysts estimate next year's revenue growth at 17.4%, which is in line with the company's growth initiatives, including capacity expansion at AZUR and potential M&A opportunities. The company's ROIC of 11.05% and ROE of 21.23% indicate a strong return on investment. As the company continues to execute on its growth strategy, investors will be watching to see if the company can meet its guidance and drive further growth.

Pricing Dynamics and Input Costs

The company's pricing strategy involves charging a premium over the recent notation for key products, and input cost pricing gets repriced every period. While there are no limiting factors on germanium and tellurium availability, pricing has increased. The company sources germanium from Canada, Europe, and the U.S., not from China, reducing its dependence on a single region.

Growth Initiatives

The company expects to continue growing capacity at AZUR, likely in Germany, and sees potential for further expansions. Margins in the specialty semiconductor space have improved due to price and economies of scale. The company is also pursuing longer-tail growth initiatives like medical imaging, long-duration storage, and defense applications, expecting increased demand and commercialization.

3. NewsRoom

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Is 5N Plus Inc. (TSE:VNP) Potentially Undervalued?

Nov -21

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5N Plus Inc. Added to MSCI Canada Small Cap Index

Nov -10

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Earnings Beat: 5N Plus Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Nov -07

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TSX Stocks Priced Below Estimated Value In November 2025

Nov -05

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5N Plus Inc. Announces CEO Succession Plan

Oct -29

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5N Plus Inc. to Release Third Quarter 2025 Results on November 3, 2025

Oct -27

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3 TSX Stocks Estimated To Be Trading At Up To 48.5% Below Intrinsic Value

Oct -07

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A Fresh Look at 5N Plus (TSX:VNP) Valuation After Research Upgrades and Technical Breakout

Sep -20

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.42%)

6. Segments

Specialty Semiconductors

Expected Growth: 8%

The 8% growth of Specialty Semiconductors from 5N Plus Inc. is driven by increasing demand for 5G infrastructure, IoT devices, and electric vehicles, which rely on high-performance semiconductors. Additionally, the growing need for energy efficiency and reduced carbon footprint in industrial and consumer applications fuels the demand for specialty semiconductors.

Performance Materials

Expected Growth: 12%

Strong demand for eco-friendly products, increasing adoption of 5N Plus' lead-free soldering solutions, and growing semiconductor market driven by 5G, IoT, and AI technologies, contribute to the 12% growth of Performance Materials segment.

7. Detailed Products

Bismuth

A brittle, white, crystalline metal with a pinkish tinge when oxidized, used in pharmaceuticals, cosmetics, and industrial applications.

Indium

A soft, malleable, and easily fusible post-transition metal, used in flat-panel displays, solar panels, and other electronic components.

Gallium

A soft, silvery-blue metal used in high-temperature thermometers, electronics, and semiconductors.

Germanium

A brittle, grayish-white metalloid used in fiber optics, infrared optics, and semiconductors.

Cadmium

A soft, bluish-white metal used in batteries, pigments, and coatings.

Tellurium

A brittle, silvery-white metalloid used in steel alloys, catalysts, and semiconductors.

Selenium

A nonmetal used in glass manufacturing, pigments, and photovoltaic cells.

8. 5N Plus Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for 5N Plus Inc. is medium due to the availability of alternative materials and technologies that can replace the company's products.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of 5N Plus Inc.'s products and the lack of alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers for raw materials, but the company's dependence on a few key suppliers for critical components.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including the need for significant capital investment and specialized expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established competitors in the industry, leading to a competitive market environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.88%
Debt Cost 7.73%
Equity Weight 48.12%
Equity Cost 12.16%
WACC 9.86%
Leverage 107.81%

11. Quality Control: 5N Plus Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ecovys

A-Score: 5.3/10

Value: 7.3

Growth: 3.3

Quality: 2.6

Yield: 5.0

Momentum: 8.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Core Molding Technologies

A-Score: 5.2/10

Value: 7.2

Growth: 5.9

Quality: 5.3

Yield: 0.0

Momentum: 7.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Flexible Solutions International

A-Score: 4.9/10

Value: 4.2

Growth: 6.4

Quality: 6.0

Yield: 1.0

Momentum: 10.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
5N Plus

A-Score: 4.3/10

Value: 1.6

Growth: 4.6

Quality: 5.7

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Koppers

A-Score: 3.8/10

Value: 6.7

Growth: 4.8

Quality: 2.7

Yield: 1.0

Momentum: 2.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
EcoSynthetix

A-Score: 3.7/10

Value: 6.6

Growth: 4.7

Quality: 3.2

Yield: 0.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.24$

Current Price

19.24$

Potential

-0.00%

Expected Cash-Flows