How Export Permits and Earnings Expectations Are Rewriting the Story for AXT

AXT’s narrative is shifting as analysts fine tune their models ahead of the next earnings release, nudging the stock’s price target while leaving fair value at $9.5. The modest tweak reflects greater confidence in export permits and near term revenue visibility, even as long term growth assumptions remain broadly intact. Read on to see what is driving this updated view and how you can stay on top of future turns in the story.

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🐂 Bullish Takeaways

• Wedbush raised its price target on AXT to $7 from $4.10, a substantial upward revision that signals increased confidence in the company ahead of Q3 results.

• The firm highlights improved revenue visibility after AXT received export permits from China’s Ministry of Commerce, allowing it to resume shipping indium phosphide substrates to additional customers, which supports the near term growth narrative.

• Wedbush maintains an Outperform rating, effectively rewarding AXT’s execution on regulatory and export hurdles, and seeing room for upside relative to its prior expectations even as the broader long term growth profile remains unchanged.

🐻 Bearish Takeaways

• Even with the higher $7 target, Wedbush’s commentary remains anchored in near term revenue adjustments rather than a wholesale upgrade of AXT’s long term growth trajectory, implying that some longer range risks and valuation questions are still unresolved.

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• AXT issued Q4 2025 revenue guidance of $27M to $30M, signaling expectations of ongoing demand and operational momentum into year end.

• The company projected a GAAP net loss of $0.03 to $0.05 per share for Q4 2025, highlighting that a return to sustained profitability remains a near term hurdle.

• Management described the guidance as balancing growth investments with cost discipline, indicating a focus on scaling revenue while gradually narrowing losses over the coming quarters.

• The discount rate decreased slightly from approximately 11.01% to about 10.88%, indicating a modest reduction in the risk profile used in the valuation model.

• Revenue growth remained essentially unchanged at roughly 26.18%, suggesting no material shift in long-term top-line expectations despite the updated permits.

• The net profit margin was effectively flat at about 10.85%, reflecting stable assumptions for AXT’s long-term profitability.

• The future P/E edged down marginally from around 30.35 times to about 30.25 times, implying a slightly lower valuation multiple applied to forward earnings.

• Fair value was unchanged at $9.50, indicating that the combined effect of small metric adjustments did not alter the model-derived intrinsic value estimate.