Shares of AXT (NASDAQ:AXTI) surged on Friday. The manufacturer of compound semiconductor substrates posted an imressive fourth-quarter update, which featured rapid revenue growth and net income that more than doubled compared to the year-ago period.
A few analyst upgrades for the tech stock likely also helped the stock on Friday.
AXT's revenue in Q4 rose 47% year over year to $27 million. This was also up from $25.5 million in the third quarter of 2020. Net income for the period was $2.1 million, or $0.05 per share. This is up from $1 million, or $0.02 per share in the year-ago period.
"2020 was a year of solid improvement for AXT, capped off by strong indium phosphide growth, particularly in 5G, in Q4, which is typically a seasonally down quarter," said AXT CEO Morris Young.
Meanwhile, three analysts upgraded their 12-month price targets for the stock. Analysts from Northland, B. Riley Securities, and BWS Financial set price targets of $15, $12, and $20, respectively.
Young is optimistic about the company's future. As he explained:
Now, with the gathering momentum of 5G and its related technologies, the technology progression in data center connectivity, and new applications emerging in healthcare and consumer devices, we believe AXT is in a strong position to lead our industry and enable many of the defining trends of the coming decade.