AXT (NASDAQ:AXTI) Shares Gap Down - Should You Sell?

Key Points

• Pre-market gap down: AXT shares opened at $71.91 after closing at $76.16 and were last trading near $70.08 on heavy volume (~3.0M shares), indicating a sharp intraday pullback.
• Earnings miss and weak margins: The company reported Q results with EPS of -$0.05 vs. -$0.04 expected and revenue of $23.04M (below estimates), plus a negative net margin of 24.07% and negative return on equity.
• Analyst/insider signals: Analysts' consensus is a "Hold" with an average price target of $22.80 (well below the market price), and insiders have sold roughly 502,278 shares (~$21.2M) in the past 90 days, including CEO sales.

AXT Inc (NASDAQ:AXTI - Get Free Report) shares gapped down prior to trading on Monday . The stock had previously closed at $76.16, but opened at $71.91. AXT shares last traded at $70.0820, with a volume of 3,003,699 shares changing hands.

Analyst Ratings Changes

AXTI has been the subject of a number of recent analyst reports. UBS Group set a $35.00 target price on shares of AXT in a research report on Tuesday, February 17th. Wedbush increased their target price on shares of AXT from $8.50 to $28.00 and gave the company an "outperform" rating in a research report on Friday, February 20th. Craig Hallum reiterated a "buy" rating on shares of AXT in a research report on Friday, January 9th. Wall Street Zen upgraded shares of AXT from a "sell" rating to a "hold" rating in a research report on Saturday, February 14th. Finally, Needham & Company LLC lowered shares of AXT from a "buy" rating to a "hold" rating in a research report on Tuesday, January 20th. Two research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company has an average rating of "Hold" and an average price target of $22.80.

AXT Stock Performance

The company has a market capitalization of $4.46 billion, a price-to-earnings ratio of -144.93 and a beta of 1.51. The stock's fifty day simple moving average is $51.70 and its two-hundred day simple moving average is $27.26.

AXT (NASDAQ:AXTI - Get Free Report) last issued its quarterly earnings results on Thursday, February 19th. The semiconductor company reported ($0.05) earnings per share for the quarter, missing analysts' consensus estimates of ($0.04) by ($0.01). AXT had a negative net margin of 24.07% and a negative return on equity of 9.50%. The business had revenue of $23.04 million during the quarter, compared to analyst estimates of $24.24 million. On average, equities analysts anticipate that AXT Inc will post -0.01 EPS for the current fiscal year.

Insider Activity

In other news, CEO Morris S. Young sold 159,536 shares of the company's stock in a transaction dated Monday, March 2nd. The stock was sold at an average price of $43.32, for a total value of $6,911,099.52. Following the transaction, the chief executive officer owned 2,482,038 shares in the company, valued at $107,521,886.16. This represents a 6.04% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director David C. Chang sold 20,000 shares of the company's stock in a transaction dated Wednesday, March 4th. The shares were sold at an average price of $38.53, for a total value of $770,600.00. Following the completion of the transaction, the director owned 112,744 shares in the company, valued at $4,344,026.32. This represents a 15.07% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 502,278 shares of company stock worth $21,196,754 in the last 90 days. Company insiders own 5.97% of the company's stock.

Institutional Investors Weigh In On AXT

Hedge funds and other institutional investors have recently modified their holdings of the stock. Kohmann Bosshard Financial Services LLC acquired a new stake in shares of AXT in the first quarter worth $31,000. XTX Topco Ltd acquired a new stake in shares of AXT during the 2nd quarter worth approximately $42,000. Jefferies Financial Group Inc. acquired a new stake in shares of AXT during the 3rd quarter worth approximately $52,000. Leonteq Securities AG acquired a new stake in AXT during the first quarter worth $57,000. Finally, State of Wyoming acquired a new stake in AXT during the fourth quarter worth $69,000. Institutional investors and hedge funds own 49.52% of the company's stock.

About AXT

AXT, Inc NASDAQ: AXTI is a global supplier of compound and single-element semiconductor substrates, offering a range of materials critical for high-performance electronic and optoelectronic devices. Founded in 1986 and headquartered in Fremont, California, AXT specializes in the development, manufacture and distribution of wafers composed of gallium arsenide (GaAs), indium phosphide (InP), gallium nitride (GaN) and other compound semiconductor materials. These substrates serve as the foundational platforms for devices used in data communications, wireless infrastructure, advanced computing, consumer electronics and photovoltaic applications.

AXT's product portfolio encompasses a variety of wafer sizes, dopant concentrations and crystal orientations, tailored to meet the precise specifications of its customers.

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