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1. Company Snapshot

1.a. Company Description

MKS Instruments, Inc.provides instruments, systems, subsystems, and process control solutions that measure, monitor, deliver, analyze, power, and control critical parameters of manufacturing processes worldwide.Its Vacuum & Analysis segment offers pressure and vacuum control solutions, including direct and indirect pressure measurement; materials delivery solutions comprising flow and valve technologies, as well as integrated pressure measurement and control subsystems, which provide customers with precise control capabilities; power solutions products, such as microwave, power delivery systems, radio frequency matching networks, and metrology products used in providing energy to etching, stripping, and deposition processes; and plasma and reactive gas products.


Its Light & Motion segment offers laser products, such as continuous wave and pulsed nanosecond, diode and diode-pumped solid-state, and fiber laser technologies; and photonics products comprising motion control, optical tables and vibration isolation systems, photonic instruments, optics and optical assemblies, opto-mechanical components, temperature sensing products for wafer fabrication systems, and laser and LED measurement products, including laser power and energy meters, laser beam profilers, and optical and photonic subsystems.Its Equipment & Solutions segment provides laser-based systems for printed circuit board (PCB) manufacturing, including flexible interconnect PCB processing systems and high-density interconnect solutions for rigid PCB manufacturing and substrate processing, and multi-layer ceramic capacitor test systems.It serves semiconductor, industrial technologies, life and health sciences, research, and defense markets.


It sells its products and services through its direct sales organization, independent distributors, and sales representatives, as well as through its websites and product catalogs.The company was incorporated in 1961 and is headquartered in Andover, Massachusetts.

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1.b. Last Insights on MKSI

MKS Instruments' recent performance was driven by strong Q3 earnings, with double-digit growth in revenues and earnings per share (EPS) beating estimates. The company's solid outlook for the fourth quarter also lifted investor sentiment. International revenue trends are being closely watched, with a growing reliance on global markets. Additionally, MKS Inc. was recognized as one of America's Most Responsible Companies for 2026 by Newsweek and Statista, Inc., enhancing its reputation.

1.c. Company Highlights

2. MKS Delivers Solid Q3 with Strong Revenue and EPS Growth

MKS delivered a solid third quarter with revenue of $988 million, up 10% year-over-year, driven by strong demand in their semiconductor and electronics and packaging end markets. Net earnings per diluted share totaled $1.93, beating estimates of $1.8. The company's gross margin was not explicitly stated, but guidance for Q4 suggests it will be around 46%, plus or minus 100 basis points.

Publication Date: Nov -13

📋 Highlights
  • Revenue & EPS Growth:: Q3 revenue hit $988 million (+10% YoY), EPS at $1.93, both above guided ranges.
  • Electronics & Packaging Surge:: Revenue rose 25% YoY to $289 million, driven by 9% sequential growth in chemistry and equipment.
  • Semiconductor Market Resilience:: $415 million revenue (-4% sequentially) but +10% YoY, with double-digit growth expected in 2026 from etch and deposition tech.
  • Chemistry Equipment Expansion:: Lead times (4-12 months) and capacity additions suggest a near-doubling of tooling sales in 2025, up high-single-digit YoY.
  • Deleveraging Progress:: $100 million voluntary prepayment in Q3, with $400 million paid down in 2025 toward 2x leverage target by 2027.

Segment Performance

Their semiconductor revenue was $415 million, down 4% sequentially, but up 10% year-over-year. The sequential decline was driven by lower RF power sales due to the timing of NAND upgrade activity. Electronics and Packaging revenue was $289 million, up 9% sequentially, driven by growth in their chemistry and equipment businesses. Specialty industrial market revenue remained relatively flat, consistent with stable trends seen over the past several quarters.

Guidance and Outlook

MKS's Q4 guidance includes revenue of $990 million, plus or minus $40 million, with semiconductor revenue expected to be $415 million, plus or minus $15 million. Electronics and Packaging revenue is expected to be $295 million, plus or minus $10 million, which would be up 16% year-over-year at midpoint. Adjusted EBITDA is expected to be $235 million, plus or minus $24 million. According to John Lee, the equipment they are building and installing now puts them in a good position for additional chemistry revenue starting in 2026.

Valuation

With a P/E Ratio of 37.08 and an EV/EBITDA of 11.32, the market is pricing in a certain level of growth for MKS. Analysts estimate next year's revenue growth at 7.3%. The company's ROE is 11.31%, and ROIC is 6.18%, indicating a decent return on equity and invested capital. The Net Debt / EBITDA ratio is -0.45, indicating a healthy debt position. The current valuation multiples suggest that the market is expecting continued growth from MKS, driven by its strong position in the semiconductor and electronics and packaging markets.

Operational Highlights

MKS continues to take advantage of their improved cash flow to reduce leverage, with another voluntary prepayment of $100 million on their term loan. The company's focus remains on investing in their business and paying down debt. Ramakumar Mayampurath discussed the company's leverage target of 2x in 2027 and stated that they have made progress in deleveraging, paying down $400 million in prepayment this year.

3. NewsRoom

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MKS Inc. Named One of America's Most Responsible Companies

Dec -03

Source: globenewswire.com

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MKS Inc. to Participate in Nasdaq 53rd Investor Conference

Dec -01

Source: globenewswire.com

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Potentially 12%-15% Consistent Income: Monthly Options Series (December 2025)

Nov -30

Source: seekingalpha.com

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Rep. Lisa C. McClain Sells Off Shares of MKS Inc. (NASDAQ:MKSI)

Nov -27

Source: defenseworld.net

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Understanding MKS (MKSI) Reliance on International Revenue

Nov -17

Source: zacks.com

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Chuck Royce's Strategic Moves: Significant Reduction in Air Lease Corp

Nov -12

Source: gurufocus.com

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MKS Inc. (MKSI) Presents at Baird 55th Annual Global Industrial Conference Transcript

Nov -11

Source: seekingalpha.com

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MKSI Q3 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.80%)

6. Segments

Vacuum Solutions Division

Expected Growth: 6.5%

The 6.5% growth of Vacuum Solutions Division from MKS Instruments, Inc. is driven by increasing demand for semiconductor manufacturing, rising adoption of IoT and 5G technologies, and growing need for vacuum solutions in industrial and scientific research applications.

Materials Solutions Division

Expected Growth: 6.8%

The 6.8% growth in Materials Solutions Division is driven by increasing demand for advanced materials in semiconductor manufacturing, growth in 5G and IoT markets, and MKS Instruments' strategic acquisitions and investments in emerging technologies such as laser and photonics.

Photonics Solutions Division

Expected Growth: 7.2%

The 7.2% growth of Photonics Solutions Division from MKS Instruments, Inc. is driven by increasing demand for high-power laser systems, growth in semiconductor capital equipment, and rising adoption of photonics in emerging markets such as 5G, autonomous vehicles, and biomedical applications.

7. Detailed Products

Vacuum Solutions

MKS Instruments provides a wide range of vacuum solutions, including vacuum pumps, valves, and gauges, used in various industries such as semiconductor, display, and solar.

Valves and MFCs

MKS Instruments offers a variety of valves and mass flow controllers (MFCs) used to control the flow of gases and liquids in various industrial processes.

Pressure Measurement and Control

MKS Instruments provides a range of pressure measurement and control products, including pressure sensors, transducers, and controllers.

Flow Measurement and Control

MKS Instruments offers a range of flow measurement and control products, including mass flow controllers, flow meters, and flow switches.

Gas Composition Analysis

MKS Instruments provides a range of gas composition analysis products, including quadrupole mass spectrometers and residual gas analyzers.

OEM Solutions

MKS Instruments offers customized OEM solutions for original equipment manufacturers, including design, development, and manufacturing of specialized components and subsystems.

Laser Technology

MKS Instruments provides a range of laser technology products, including laser sources, beam delivery systems, and laser-based systems.

8. MKS Instruments, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for MKS Instruments, Inc. is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for MKS Instruments, Inc. is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for MKS Instruments, Inc. is medium due to the company's dependence on a few key suppliers for critical components.

Threat Of New Entrants

The threat of new entrants for MKS Instruments, Inc. is high due to the relatively low barriers to entry in the industry and the attractiveness of the market.

Intensity Of Rivalry

The intensity of rivalry for MKS Instruments, Inc. is high due to the presence of several established competitors in the market and the high stakes involved in the industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 66.10%
Debt Cost 7.42%
Equity Weight 33.90%
Equity Cost 12.39%
WACC 9.11%
Leverage 194.94%

11. Quality Control: MKS Instruments, Inc. passed 3 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
Trimble

A-Score: 4.8/10

Value: 1.2

Growth: 5.2

Quality: 6.6

Yield: 0.0

Momentum: 7.5

Volatility: 8.3

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Itron

A-Score: 4.6/10

Value: 3.1

Growth: 5.7

Quality: 6.7

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

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Cognex

A-Score: 3.9/10

Value: 0.9

Growth: 2.7

Quality: 7.6

Yield: 2.0

Momentum: 6.5

Volatility: 4.0

1-Year Total Return ->

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MKS Instruments

A-Score: 3.8/10

Value: 2.8

Growth: 5.0

Quality: 4.7

Yield: 1.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

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Novanta

A-Score: 3.3/10

Value: 1.1

Growth: 7.0

Quality: 5.6

Yield: 0.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Coherent

A-Score: 3.2/10

Value: 1.4

Growth: 4.9

Quality: 3.8

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

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

162.94$

Current Price

162.94$

Potential

-0.00%

Expected Cash-Flows