Soitec (ENXTPA:SOI) Guides For Over 30% Growth, Is The Discount Real?
Soitec (ENXTPA:SOI) is back in focus after first quarter revenue reached €113 million, compared to €92 million a year earlier, alongside fresh guidance and capacity news in its Photonics-SOI business.
See our latest analysis for Soitec.
Soitec’s recent guidance around more than 30% expected year on year revenue growth in the second quarter and the ramp up of its Singapore Photonics SOI capacity has coincided with short term momentum. The 1 day share price return is 5.1% and the 7 day share price return is 10%, while the 90 day share price return is down 25.6% and the 3 year total shareholder return is down 37.7%. This suggests recent enthusiasm is building from a weak longer term base.
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Soitec shares now sit about 27% below the average analyst price target after this sharp bounce. Is that a genuine discount, or is the market right to stay cautious given recent share price and earnings volatility?
Most Popular Narrative: 21.3% Undervalued
The most followed narrative currently sees Soitec’s fair value at €138.89, above the last close at €109.30. That gap is built on some punchy growth and margin assumptions that go well beyond the latest quarter.
The ongoing large-scale transition to AI, data center expansion, and proliferating connected devices (including IoT) is driving robust and accelerating demand for advanced substrates like those Soitec produces, supporting long-term revenue visibility and potential 2x revenue opportunity as their addressable market is projected to grow from 5 million wafers in 2024 to 12 million by 2030.
Want to see what sits behind that wafer growth story and higher fair value for Soitec? The narrative leans on stronger revenue compounding, fatter profit margins and a future earnings multiple usually reserved for sector leaders. Curious which exact blend of growth and profitability is used to justify that target and how a discount rate near 12% shapes the final number?
Result: Fair Value of €138.89 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Soitec’s story still hinges on inventory clean ups and tougher competition in areas like silicon carbide, which could cap margins and delay any meaningful repricing.
Find out about the key risks to this Soitec narrative.
Another View on Soitec’s Valuation
The narrative model points to Soitec looking 21.3% undervalued, yet the simple P/S check tells a different story. At 6.6x sales, the stock trades above the European semiconductor average of 4.6x and above peers at 5.1x. It also sits well ahead of the 4.3x fair ratio the SWS model suggests the market could move toward, which implies less margin for error if expectations slip. Which signal do you treat as your anchor today?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With Soitec pulling in mixed signals on value and sentiment, this is the moment to look at the full picture yourself and move quickly to shape your own view with the 1 key reward and 1 important warning sign.
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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.
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