Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Super-Cyclical Xcerra Seems To Have More Left In The Tank

Semiconductor companies have enough cyclical volatility to frustrate most investors. Semiconductor equipment companies are even worse. Semiconductor test equipment is its own special corner of cyclical-hell, as peak-to-trough moves can easily exceed 66%. What goes down can go up again, though, and while Xcerra (NASDAQ:XCRA) (LTXC) has more than doubled over the past year, momentum in the testing market and the stock's valuation suggests there could still be more gains in store.

Beat-And-Raise In A Recovering Market

Xcerra posted 54% sequential revenue growth this quarter (and 24% yoy like-for-like growth), meeting the high end of management's guidance and exceeding sell-side expectations by a few percentage points. Core tester revenue was up about 80% sequentially, underscoring the...

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