Zacks Investment Research upgraded Veeco Instruments Inc. VECO to a Zacks Rank #1 (Strong Buy) on Jul 2, 2015. Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of performing better than the broader market.
Why the Upgrade?
In the last four trailing quarters, Veeco Instruments reported better-than-expected results, with an average positive earnings surprise of 55.51%. The company’s net loss of 11 cents per share in first-quarter 2015 fared better than the Zacks Consensus Estimate of a loss of 21 cents per share.
Revenues increased 8.3% year over year on the back of a sound product line. Also, gross profit rose 4% over the year-ago tally; while adjusted earnings before interest, tax, depreciation and amortization improved to $2.7 million as against $0.1 million in the prior-year comparable quarter. Cash position was solid, with cash and cash equivalents up by 11.9% sequentially.
Impressed with the quarterly results and confident about the performance of its products, Veeco Instruments has raised its revenue growth forecast for 2015 to over 35% versus the previous expectation of over 30%. For second-quarter 2015, the company predicts revenues in a range of $100−$150 million, above $98 million in the first quarter.
Over the last 60 days, the Zacks Consensus Estimate for Veeco Instruments rose 34.5% to 39 cents for 2015; while the estimate increased 100% to 2 cents per share for the second quarter. Also, the company’s earnings are projected to grow 10% over the next 5 years.
Other Stocks to Consider
Veeco Instruments Inc., currently, has a $1.1 billion market capitalization. Other stocks worth considering in the machinery industry include Axcelis Technologies Inc. ACLS, EMCORE Corporation EMKR and Tessera Technologies Inc. TSRA. While Axcelis Technologies sport the same rank as Veeco Instruments, both EMCORE Corporation and Tessera Technologies carry a Zacks Rank #2 (Buy).
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