Shares of ACM Research (ACMR -4.42%), which makes equipment to clean semiconductor wafers, were taking a dive today after the company provided disappointing preliminary revenue numbers.
As of 2:18 p.m. ET, the stock was down 19.6%.
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Revenue is up, but not by enough
In an update ahead of its third-quarter earnings report, ACM Research said it expected to report $165 million to $168 million in revenue, which was below the analyst consensus of $173.7 million. While that figure missed expectations, the midpoint still represents solid growth, up 24.5% from the quarter a year ago.
ACM Research had been rallying this year as revenue and profit growth rebounded from an earlier lull in the semiconductor industry, a sign of the expected boom coming from demand for artificial intelligence (AI) chips.
In its second-quarter earnings report, the company also said that COVID-era disruptions are now behind it, and it's experiencing market share gains from both new and existing customers.
What's next for ACM Research
In the second-quarter report, ACM called for revenue of $515 million to $585 million, or 41% revenue growth at the midpoint.
Following the third-quarter preliminary update, the company still seems on track to hit that target, and management talked up expansions in the U.S. and Europe, which could help it geographically diversify as it's mostly dependent on the Asian market.
Following today's sell-off, the stock looks like even more of a bargain, trading at a forward P/E of 13. That seems to reflect some risk from evolving rules about the U.S. exporting chip technology to China, but the company's performance this year makes that look like a non-factor right now.
Investors will learn more about the ACM's prospects when it reports third-quarter earnings on Nov. 7. Analysts expect earnings per share to decline from $0.45 to $0.35 even as revenue jumps.
