Rudolph Technologies: Zacks’ Bull of the Day Play

Rudolph Technologies (RTEC) is worldwide leader in design, development, manufacture and support of defect inspection, advanced packaging lithography, process control metrology, and data analysis systems and software used by semiconductor device manufacturers.

Rudolph provides a full-fab solution enabling microelectronic device manufacturers to drive down the costs and time to market of their products. Their equipment and software solutions are used in both the wafer processing and final manufacturing of chips and in adjacent markets.

Headquartered in Flanders, NJ, the company has offices in six U.S. states as also in Asia and Europe. The company was founded in 1940 and went public in 1999.

Excellent Earnings and Upbeat Guidance

The company reported its Q4 results on February 2. Revenues for the quarter were $49.6 million, up 6% sequentially and ahead of the company’s guidance. Asia accounted for 52% of the revenues, U.S. 43%, and Europe 5%. Front-end sales were 61% of sales, while back-end sales were 39%.

Gross margin was 52% (53%excluding the impact of the restructuring); making it five years of 50%plus margins for the company. Excluding special items, non-GAAP net income was $4.5 million, or $0.13 per share, compared to $3.5 million, or $0.10 per share, in the previous quarter.

Results exceeded street expectations. Rudolph has missed estimates in only 3 out of 20 quarters since 2010. The company expects Q1 revenues to be between $47 million and $51 million with non-GAAP earnings to between $0.09 and $0.14 per share.

Positive Earnings Estimates Revisions  

After excellent results and upbeat guidance, analysts have raised their estimates for the company. Zacks Consensus Estimate for the current year is now $2.06 per share, up from $1.67 per share, 30 days ago. Rising estimates sent the stock back to Zacks Rank #1 (Strong Buy) after the results.

The Bottom Line

This stock has been on a very strong uptrend lately, gaining almost 35% in the past two months. But with its strong momentum, solid results and positive outlook for the industry, this trend may continue for some time.

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