Needham has raised its price target on Camtek Ltd. stock (NASDAQ: CAMT) to $175 from $160, while maintaining a Buy rating. The brokerage's revised target equates to 40 times its updated 2027 non-GAAP earnings per share estimate, a multiple the firm applied after lifting its 2027 forecasts in response to the company's most recent results.
Camtek reported fourth-quarter 2025 revenue of $128.1 million, a sequential increase and a result that was slightly above Needham's expectations. Non-GAAP gross margins for the period came in at 51.1%, a touch below the firm's estimate. Management said AI-related revenue - specifically from high-bandwidth memory (HBM) and chiplets - represented approximately 50% of sales in the quarter. That mix helped drive a 21.1% increase in revenue over the last twelve months.
For the first quarter of 2026, Camtek guided revenue to $120 million. The company characterized this outlook as representing year-over-year growth and noted that the outlook has improved over the past two to three months, resulting in a projection that exceeded prior expectations. Company management also signaled that it expects double-digit growth for full-year 2026 and anticipates second-half revenue to exceed first-half revenue.
Management highlighted an expectation for a notable revenue pickup in the third quarter of 2026, which it said is likely to be driven by demand for HBM. The company expects gross margins to improve through the year, attributing the planned margin recovery to cost reductions and an increased share of sales from new products compared with 2025.
Market reaction to the quarterly release was mixed. While Needham increased its target and raised multi-year estimates, the company's first-quarter revenue guidance did not meet some investor expectations. Camtek's shares fell by more than 2% in pre-market trading following the guidance. Separately, Northland adjusted its view of the stock to Market Perform from Outperform, even as it raised its own price target to $150 from $128.
In its note, Northland said Camtek's results and guidance were in line with consensus estimates and added that the company expects to gain market share this year. However, the firm also observed that Camtek is currently underperforming its peers. Those assessments, combined with the mixed market reaction to the guidance, give investors a nuanced view of Camtek's current standing and prospects.
The updated Needham valuation and the company's AI-linked revenue mix are central to the bullish case, while near-term guidance and rival analysts' adjustments are factors market participants are weighing as they reassess the stock's trajectory.