Kulicke And Soffa: Why Market Response Was Restrained Though Earnings Were Outstanding

Summary

• Recent numbers from KLIC have been outstanding, and the Q2 FY2021 ones were no exception, with revenue and EPS growing by 125.7% and 384.6%, respectively.
• KLIC raised its FY2021 outlook with the forecast calling for Q3 EPS to quintuple, yet the stock has struggled in spite of the terrific numbers.
• KLIC is calling for a slowdown in FY2022, and the stock is priced for one based on the multiples it’s trading at, even though there’s no sign of it yet.
• Long KLIC makes sense if there’s a slowdown or not, especially since KLIC may once again be too conservative with its outlook.

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It’s not everyday that you get to see the kind of quarterly numbers that Kulicke and Soffa Industries (NASDAQ:KLIC) reported in its latest earnings report. The forecast sees non-GAAP EPS quintupling in Q3 FY2021 after quadrupling in Q2. KLIC also raised

Analyst’s Disclosure:I am/we are long KLIC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.