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1. Company Snapshot

1.a. Company Description

Veeco Instruments Inc., together with its subsidiaries, develops, manufactures, sells, and supports semiconductor and thin film process equipment primarily to make electronic devices worldwide.The company offers laser annealing, ion beam deposition and etch, metal organic chemical vapor deposition, single wafer wet processing and surface preparation, molecular beam epitaxy, and atomic layer deposition and other deposition systems, as well as packaging lithography equipment.Its process equipment systems are used in the production of a range of microelectronic components, including logic, dynamic random-access memory, photonics devices, power electronics, radio frequency filters and amplifiers, magnetic heads for hard disk drives, and other semiconductor devices.


In addition, the company markets and sells its products to integrated device manufacturers and foundries; outsourced semiconductor assembly and test, hard disk drive, and photonics manufacturers; and research centers and universities.Veeco Instruments Inc.was founded in 1945 and is headquartered in Plainview, New York.

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1.b. Last Insights on VECO

Veeco Instruments' recent performance was negatively impacted by the challenging Electronics - Manufacturing Machinery industry, as highlighted in the Zacks Industry Outlook. The industry's participants, including Veeco, are facing increased competition and capital spending pressures. Additionally, the company's reliance on a few major customers, such as Intel, makes it vulnerable to supply chain disruptions and fluctuations in demand. Furthermore, the recent announcement of Veeco's EPIC Supplier Award, while a positive recognition, may not necessarily translate to improved financial performance.

1.c. Company Highlights

2. Veeco's 2025 Earnings: A Year of Strategic Investment and Growth

Veeco's revenue for 2025 came in at $664 million, a decline of 7% from the prior year, while the semiconductor business delivered $477 million in revenue, up 2% year-over-year and comprising 72% of total revenue. The actual EPS was $0.01838, missing estimates of $0.25. Gross margin was not explicitly stated, but the company guided for Q1 2026 gross margin between 37% and 38%. The earnings release highlighted the company's strategic investments in next-generation technologies, which are gaining traction driven by accelerating demand from AI and high-performance computing.

Publication Date: Mar -03

📋 Highlights

Segment Performance

The semiconductor business reached a record revenue in 2025, driven by laser annealing, wet processing, and ion beam EUV technology. Veeco shipped an LSA evaluation system to its second Tier 1 DRAM customer, marking progress in penetrating memory customers. The advanced packaging business for wet processing and lithography tools continues to expand, with a projected Service Addressable Market (SAM) of $650 million by 2029. The compound semiconductor market saw orders for the new Propel 300-millimeter GaN-on-silicon system, supporting GaN power and microLED applications.

Outlook and Guidance

Veeco guided for Q1 2026 revenue between $150 million and $170 million, with gross margin between 37% and 38%. For the full year 2026, revenue is expected to grow between $740 million and $800 million, representing a growth rate of 12.3% at the midpoint, in line with analyst estimates. The company expects strong growth from Tier 1 customers driven by AI and high-performance computing, offsetting declines in mature node China business. Gross margins are expected to accelerate in the second half of 2026, driven by higher-margin new products and increased data storage business.

Valuation

Veeco's current valuation metrics indicate a P/E Ratio of 54.76, P/B Ratio of 2.19, and P/S Ratio of 2.97. The EV/EBITDA is 28.04, and the Free Cash Flow Yield is 2.7%. The ROE is 4.13%, and ROIC is 2.8%. These metrics suggest that the market is pricing in significant growth expectations, which Veeco is attempting to meet through its strategic investments in next-generation technologies.

3. NewsRoom

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4 Stocks With Strong Efficiency Metrics and Profit Potential

Mar -13

Source: zacks.com

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Victory Capital Management Inc. Purchases 74,106 Shares of Veeco Instruments Inc. $VECO

Mar -10

Source: defenseworld.net

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Veeco Instruments (NASDAQ:VECO) CEO Sells $1,581,000.00 in Stock

Mar -08

Source: defenseworld.net

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Veeco Instruments Inc. $VECO Shares Acquired by Fisher Asset Management LLC

Mar -04

Source: defenseworld.net

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Veeco Announces Upcoming Investor Events

Feb -27

Source: globenewswire.com

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Veeco Instruments Inc. (VECO) Q4 2025 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

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Veeco Reports Fourth Quarter and Fiscal Year 2025 Financial Results

Feb -25

Source: globenewswire.com

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Veeco Announces Date for Fourth Quarter and Full Year 2025 Financial Results and Conference Call

Feb -11

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.52%)

6. Segments

Semiconductor

Expected Growth: 8%

Veeco Instruments Inc.'s Semiconductor segment growth is driven by increasing demand for advanced semiconductor devices, adoption of 5G and IoT technologies, and rising investments in artificial intelligence and machine learning. Additionally, the growing need for semiconductor manufacturing equipment and Veeco's leadership in MOCVD and EPI technologies contribute to its 8% growth.

Data Storage

Expected Growth: 6%

Veeco Instruments Inc.'s 6% growth in Data Storage is driven by increasing demand for high-capacity storage devices, advancements in semiconductor technology, and rising adoption of cloud storage. Additionally, the growing need for efficient data management and analytics, as well as the proliferation of IoT devices, contribute to this growth.

Compound Semiconductor

Expected Growth: 9%

Veeco Instruments' Compound Semiconductor segment growth is driven by increasing demand for 5G, IoT, and electric vehicles, which rely on high-performance semiconductors. Additionally, the adoption of advanced packaging technologies, such as flip chip and wafer-level packaging, fuels growth. Furthermore, Veeco's leadership in MOCVD and MBE technologies enables it to capitalize on the rising demand for high-brightness LEDs and laser diodes.

Scientific and Other

Expected Growth: 5%

Veeco Instruments Inc.'s Scientific and Other segment growth is driven by increasing demand for advanced materials and semiconductor technologies, government investments in scientific research, and growing adoption of 3D sensing and augmented reality applications. Additionally, the company's strategic acquisitions and partnerships have expanded its product offerings and enhanced its market position, contributing to the 5% growth rate.

7. Detailed Products

MOCVD Systems

Veeco's Metal Organic Chemical Vapor Deposition (MOCVD) systems are used to deposit thin films of semiconductor materials for LEDs, lasers, and other optoelectronic devices.

MBE Systems

Veeco's Molecular Beam Epitaxy (MBE) systems are used to grow high-quality epitaxial layers for advanced semiconductor devices, including transistors, sensors, and optoelectronic devices.

Ion Beam Etch and Deposition Systems

Veeco's Ion Beam Etch and Deposition Systems are used to etch and deposit thin films of materials for semiconductor, data storage, and other applications.

Atomic Layer Deposition (ALD) Systems

Veeco's ALD systems are used to deposit ultra-thin films of materials for semiconductor, display, and other applications.

Physical Vapor Deposition (PVD) Systems

Veeco's PVD systems are used to deposit thin films of materials for semiconductor, data storage, and other applications.

Laser Annealing Systems

Veeco's Laser Annealing Systems are used to activate dopants and improve semiconductor device performance.

8. Veeco Instruments Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Veeco Instruments Inc. faces moderate threat from substitutes, as there are limited alternatives to its semiconductor manufacturing equipment and metrology systems.

Bargaining Power Of Customers

Veeco Instruments Inc. has a diverse customer base, which reduces the bargaining power of individual customers, and the company's products are often customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

Veeco Instruments Inc. relies on a few key suppliers for critical components, which gives them some bargaining power, but the company's size and scale also give it some negotiating power.

Threat Of New Entrants

The semiconductor manufacturing equipment and metrology systems industry has high barriers to entry, including significant capital requirements and technical expertise, which limits the threat of new entrants.

Intensity Of Rivalry

Veeco Instruments Inc. operates in a highly competitive industry with several established players, and the company must continually innovate and invest in research and development to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.32%
Debt Cost 3.95%
Equity Weight 70.68%
Equity Cost 9.79%
WACC 8.07%
Leverage 41.49%

11. Quality Control: Veeco Instruments Inc. passed 6 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

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Rambus

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Value: 1.0

Growth: 7.9

Quality: 9.0

Yield: 0.0

Momentum: 9.5

Volatility: 2.3

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Quality: 8.6

Yield: 3.0

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Amkor Technology

A-Score: 4.5/10

Value: 4.2

Growth: 5.4

Quality: 4.9

Yield: 2.0

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Veeco Instruments

A-Score: 4.0/10

Value: 3.0

Growth: 5.9

Quality: 5.9

Yield: 0.0

Momentum: 5.0

Volatility: 4.3

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Vishay

A-Score: 3.9/10

Value: 8.2

Growth: 1.9

Quality: 3.0

Yield: 5.0

Momentum: 1.5

Volatility: 3.7

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MACOM Tech

A-Score: 3.8/10

Value: 2.0

Growth: 4.4

Quality: 3.8

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

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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

30.65$

Current Price

30.65$

Potential

-0.00%

Expected Cash-Flows