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AXT (AXTI) Valuation Check After Completing Its Follow-On Equity Offering

Simply Wall St · 6d ago

AXT (AXTI) just wrapped up a follow on equity offering, raising about $87 million by issuing over 7 million new common shares at roughly $12.25. This move reshapes both its balance sheet and shareholder base.

See our latest analysis for AXT.

The equity raise lands on the back of powerful momentum, with a 30 day share price return of roughly 45 percent and a staggering 1 year total shareholder return above 600 percent. This signals that investors are leaning into AXT's growth and risk reset story.

If this kind of sharp re rating has you curious about what else is moving, it could be worth exploring high growth tech and AI names through high growth tech and AI stocks.

Yet with AXT now trading well above analyst targets and still loss making despite rapid growth, investors face a pivotal question: is this surge just the start of a rerating, or has the market already priced in tomorrow’s upside?

Most Popular Narrative: 76.4% Overvalued

With AXT last closing at $16.76 against a narrative fair value of $9.50, the current share price assumes far richer prospects than the model does.

The upgrade cycle toward higher speed optical transceivers in AI and cloud applications requires higher quality, low EPD substrate material, an area where AXT leads technologically, supporting both higher average selling prices and potential gross margin expansion as quality specifications become more stringent.

Read the complete narrative.

Want to see what kind of revenue runway and margin rebound could defend such a steep premium to fair value? The narrative leans on aggressive growth, a sharp earnings swing, and a future earnings multiple more often reserved for established leaders. Curious how those moving parts combine into one punchy fair value call? Dive in to unpack the full playbook behind this valuation.

Result: Fair Value of $9.50 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent export permit uncertainty and heavy reliance on a concentrated Chinese customer base could quickly undercut the positive outlook for growth and margin recovery.

Find out about the key risks to this AXT narrative.

Build Your Own AXT Narrative

If you see the setup differently or would rather dig into the numbers yourself, you can spin up a custom view in minutes: Do it your way.

A great starting point for your AXT research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.