Soitec Earnings: Confirms Full-Year Target as Mobile Segment Starts to Recover

We maintain our EUR 150 fair value estimate for narrow-moat Soitec. We believe investors were anticipating Soitec would miss its guidance for the first half of the year, as shares jumped by 13% after the firm reached its own estimates. Second-quarter sales declined by 9% to EUR 124 million, a recovery from the 24% decline in the first quarter, leading to a blended 15% year-on-year decline in the first half of the year, in line with management’s targets. Management maintained its outlook for fiscal 2025, where it expects flat revenue growth compared with 2024 and a 35% EBITDA margin, in line with our estimates. This implies a strong sequential recovery of around 80% for the second half, compared with a very weak first half of the year, where the mobile segment should be the main driver. Although uncertainty remains given the weak semiconductor outlook—excluding artificial intelligence—the company is making good progress on its recovery. We see the shares as cheap, trading at 15 times and 11 times our estimated 2025 and 2026 earnings, respectively.