Photronics, Inc. PLAB

Photronics is an essential supplier with genuine, if narrow, advantages—especially in U.S. high‑end masks where scarcity and security matter. Margins have structurally improved since 2020, free cash flow is real (though bumpy), and the balance sheet is fortress‑like. The medium‑term playbook is clear: fill the U.S. multi‑beam tool, ride AMOLED Gen 8.6, and bring a 6–8nm Asia upgrade online by 2027/2028. The catch is that demand is short‑cycle, geopolitics are noisy, and supplier bottlenecks exist, so the compounding path is credible but not guaranteed. With the stock a touch above our weighted fair value and outcomes fairly wide, this looks like a quality cyclical with an emerging moat—promising, but still in “show‑me” mode for long‑term compounding.