Kelper upgrades XFAB to Buy, highlighting improving fundamentals and structural growth from AI-related technologies, viewing it as undervalued compared to peers.
Strengthening demand from Melexis, AI-driven growth in SiC, GaN, and photonics offsetting auto cyclicality, and XFAB trading at a significant discount to peers like SILEX; potential growth linked to Nvidia as a key driver.
Kelper upgrades $XFAB to "Buy" citing: - Melexis demand strengthening “week-after-week, day-after-day” (their lead customer). - AI giving XFAB a structural growth leg with SiC, GaN, and photonics offsetting auto cyclicality. - Scarce Western speciality foundries like $SILEX commanding higher multiples. "X-Fab remains the cheapest specialty foundry peer on every multiple, trading at 4.8x 2027 EV/EBITDA versus a peer median of 14.5x" I treat this as good signal for the core fundamentals improving like auto players. But in terms of unpriced long term growth vectors, I'm personally looking at XFAB from a different angle in terms of photonics growth with photonixfab. Given $NVDA as a potential key driver. But it's hard for traditional firms to price these types of active developments into valuation models until there's volume contracts.
| Horizon | Raw move | vs SPY |
|---|---|---|
| 1 day | +0.7% | +1.2% |
| 1 week | +4.1% | +4.4% |
| 1 month | — | — |
| 3 months | — | — |
| 6 months | — | — |