ACM Research Gains 13% in a Month: Should You Buy the Stock?

ACM Research ACMR shares have rallied 12.8% over the past month, outperforming the Zacks Computer & Technology sector’s decline of 11.2% and the Zacks Semiconductor Equipment - Material Services industry’s return of 5.6%.

ACMR shares have also fared better than its industry peers, including Chipmos Technologies’s IMOS 10.5% decline over the same time frame.

ACM Research's stock price has increased on 31% revenue growth in the fourth quarter of 2024, driven by improved sales across key product lines, including single-wafer cleaning and electrochemical plating (ECP) technologies. Its strong and diversified product portfolio and positive 2025 outlook have strengthened investor confidence, contributing to its upward momentum.

Strong Product Portfolio Aids ACMR’s Prospects

ACM Research's broad range of cleaning tools, including SAPS, TEBO, Tahoe, semi-critical, SPM, and Bevel Etch, gives the company a strong competitive edge in China and the global market. Its comprehensive portfolio ensures higher efficiency, precision and reliability in wafer cleaning, strengthening its presence in the industry and driving long-term growth.

ACMR has also developed a complete suite of cleaning tools, including the Ultra C wb, Ultra C sb and Ultra C pr models. This comprehensive product line has enabled the company to address a wide range of customer requirements, enhancing its market position.

ACM Research is expanding its Serviceable Available Market through product innovations in semiconductor equipment. The company is addressing the evolving needs of semiconductor manufacturers by introducing advanced solutions such as single-wafer wet cleaning tools, ECP systems, and thermal and plasma-enhanced ALD furnace tools.

Major Customer Base Drives ACM Research's Growth

ACMR’s revenues were significantly influenced by four key customers, each contributing at least 10% to total revenues, reflecting a highly influential client base.

The Huahong Group emerged as ACM Research’s largest customer in 2024, accounting for 15% of total sales, solidifying its role as a key revenue driver. Close behind, Semiconductor Manufacturing International Corporation contributed 14%, highlighting ACM’s strong foothold in China’s semiconductor sector.

Yangtze Memory Technologies Co. and PXW each contributed 12% to ACM Research’s revenue in 2024, underscoring the company’s dependence on major industry players. This revenue distribution highlights ACM’s deep integration into China’s semiconductor supply chain, fueled by sustained demand for its wet-processing and advanced packaging tools.

ACMR Provides Optimistic 2025 Outlook

Despite challenges posed by international trade policies, key customer spending trends and supply-chain constraints, ACM Research remains optimistic about its 2025 outlook, focusing on growth opportunities and market expansion.

For 2025, the company expects total revenues of $850-$950 million. The Zacks Consensus Estimate for 2025 revenues is pegged at $928.32 million, indicating year-over-year growth of 18.69%.

ACMR raised its gross margin view to 42-48% from the previous 40-45%, reflecting improved operational efficiency.

The consensus mark for 2025 earnings is pegged at $2.15 per share, up 19.4% over the past 30 days.

ACMR’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an average earnings surprise of 97.86%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

ACM Research’s Zacks Rank

ACMR currently sports a Zacks Rank #1 (Strong Buy), which implies that investors should start accumulating the stock right now.

Other Key Picks

ATN International ATNI and Dropbox DBX are some other top-ranked stocks in the broader tech sector. These two companies presently flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rates for ATN International and Dropbox are currently pegged at 10% and 11.44%, respectively.

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This article originally published on Zacks Investment Research (zacks.com).

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