Last Update 30 Nov 25

Fair value Decreased 26%

SOI: Leadership Transition And Sector Recovery Will Drive Share Momentum Ahead

Analysts have lowered their price target for Soitec from €48.35 to €36.00, citing cautious sector outlooks and recalibrated growth expectations.

Analyst Commentary

Analyst opinions on Soitec remain mixed as the company faces both headwinds and selective areas of optimism in its near-term outlook. Below are the key takeaways from recent research coverage.

Bullish Takeaways

Some analysts note that current valuations, especially based on long-term estimates through 2027, could offer support for the stock if sector sentiment improves.
Strength in artificial intelligence markets suggests a foundation for future demand, providing a potential catalyst for Soitec’s product lines over time.
Stable Neutral or Equal Weight ratings indicate that while growth is muted in the near term, the company's competitive position within the semiconductor industry remains intact.

Bearish Takeaways

Several analysts have reduced price targets significantly, citing muted growth expectations and challenging industry conditions affecting near-term execution.
Concerns remain about limited direct benefits from artificial intelligence trends for Soitec compared to select sector peers.
Analysts caution against sector-wide softness in European technology hardware, emphasizing that continuing macroeconomic uncertainty could further pressure valuation.
Some maintain a Sell rating, signaling skepticism over the pace and reliability of any potential recovery in demand.

What's in the News

Soitec provided revenue guidance for the third quarter of 2026, anticipating mid-to-high single-digit sequential organic growth. (Corporate Guidance)
Pierre Barnabé, Chief Executive Officer, announced plans to leave Soitec for personal reasons but will remain in his role through March 31, 2026 to support a smooth leadership transition. (Executive Changes)
Soitec and CEA demonstrated that FD-SOI substrates offer substantial protection against advanced fault injection attacks, helping address emerging automotive cybersecurity standards. (Strategic Alliances)
An upcoming Board Meeting on November 19, 2025 will approve revenue for the second quarter and half-year results of fiscal year 2026. (Board Meeting)
A Board Meeting on October 1, 2025 will consider the appointment of Julie Galland as the new representative of CEA Investissement on the Board, succeeding François Jacq. (Board Meeting)

Valuation Changes

Consensus Analyst Price Target has fallen significantly from €48.35 to €36.00, reflecting increased caution in the sector outlook.
Discount Rate remains unchanged at 12.3%, which signals steady risk assessments among analysts.
Revenue Growth assumptions have risen from 0.90% to 2.40%, which indicates slightly more optimistic expectations for future top-line expansion.
Net Profit Margin estimates have edged down, moving from 10.11% to 9.76%, which implies a modest decline in profitability forecasts.
Future P/E projection has decreased from 25.91x to 21.72x, suggesting lower anticipated valuation relative to future earnings.

Rising AI, wireless, and connected device trends are driving strong, diversified demand for Soitec's advanced substrates, supporting long-term growth and reduced revenue volatility.
Disciplined expansion, automation, and ongoing innovation strengthen technological leadership, enable profitability gains, and reinforce high barriers to entry.
Excess inventories, slowing content growth, rising competition, weak end markets, and macro headwinds are pressuring Soitec's revenue growth, margins, and financial visibility.

Catalysts

About Soitec

Designs and manufactures semiconductor materials worldwide.What are the underlying business or industry changes driving this perspective?

The ongoing large-scale transition to AI, data center expansion, and proliferating connected devices (including IoT) is driving robust and accelerating demand for advanced substrates like those Soitec produces, supporting long-term revenue visibility and potential 2x revenue opportunity as their addressable market is projected to grow from 5 million wafers in 2024 to 12 million by 2030.
The rollout of 5G/6G, next-gen wireless, and increased demand for high-performance and energy-efficient chips-especially for mobile, automotive, data center, and edge AI-are likely to boost demand for Soitec's leading-edge SOI, POI, and Photonics-SOI substrates, setting the stage for volume-driven revenue and margin expansion as industry trends normalize.
Strategic and disciplined capacity expansion (using existing assets), increased automation, and ongoing process/yield improvement allow Soitec to scale profitably while limiting capital intensity-so when demand recovers, operating leverage should drive EBIT margin significantly higher (towards 25%) and strengthen free cash flow generation.
Strong product and customer diversification-moving beyond dependence on RF-SOI or a few major clients-means Soitec is positioned to capture secular growth in high-value segments like automotive, photonics, power electronics, and AI, which should mitigate future revenue volatility and expand market share.
Continued R&D and innovation (e.g., in SmartSiC, POI, Photonics-SOI, and new materials) anchor Soitec's technological leadership and high barriers to entry, supporting premium pricing and stable/high net margins as demand for heterogeneous integration and specialty substrates accelerates across end markets.

Soitec Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Soitec's revenue will grow by 1.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 10.2% today to 10.3% in 3 years time.
Analysts expect earnings to reach €95.2 million (and earnings per share of €2.75) by about September 2028, up from €91.2 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €152 million in earnings, and the most bearish expecting €64 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.4x on those 2028 earnings, up from 12.9x today. This future PE is lower than the current PE for the GB Semiconductor industry at 33.4x.
Analysts expect the number of shares outstanding to decline by 0.06% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 12.1%, as per the Simply Wall St company report.

Soitec Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company faces continuing risks from excess customer inventories and significant inventory corrections in RF-SOI and other product lines, which are leading to suppressed short
and potentially medium-term revenues and increased working capital requirements; if inventory normalization is delayed or "new normal" inventory levels remain structurally higher, any near-term rebound in revenue and earnings could be restrained.
Secular shifts such as "shrink" (chip size reduction) and module optimization in the smartphone industry are reducing SOI content growth per end device, creating a headwind for Soitec's largest business line and capping its ability to fully benefit from overall smartphone market recovery; this could pressure both top-line revenue growth and gross margins as high-margin legacy products decelerate.
The competitive landscape for silicon carbide (SiC) and other compound substrates is intensifying, with aggressive price declines driven by Chinese suppliers and the proliferation of new licenses; elevated competition could erode Soitec's pricing power, compress margins, and challenge the commercial ramp-up of SmartSiC, especially as automotive and power markets experience delays and more stringent qualification cycles.
Sluggish demand in the automotive and industrial sectors, coupled with specific customer order pauses and a broader weakness in EV adoption, introduces material uncertainty for segmental revenue, delays the expected ramp in high-growth areas like Power-SOI and SmartSiC, and may lead to underutilized capacity and lower operating leverage in these segments.
Persistent macro and geopolitical headwinds, including tariff uncertainty, customer pushouts, FX volatility, and trade tensions, present ongoing risks to both revenue visibility and supply chain stability; these could result in continued quarterly guidance withdrawals, capital expenditure deferrals, and volatility in Soitec's revenues, margins, and free cash flow.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €52.944 for Soitec based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €99.0, and the most bearish reporting a price target of just €32.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €928.3 million, earnings will come to €95.2 million, and it would be trading on a PE ratio of 27.4x, assuming you use a discount rate of 12.1%.
Given the current share price of €33.05, the analyst price target of €52.94 is 37.6% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

SOI: Future AI Momentum Will Drive Share Recovery Amid Sector Uncertainty