MKSI: DRAM And Wafer Fab Upswing Will Drive Strong 2025 To 2027 Cycle

Analysts have lifted our MKS fair value estimate to $200 from $152.52 as they factor in higher long term revenue growth, expanding profit margins, and a richer future P/E multiple, which is supported by a wave of recent price target increases and growing confidence in the company’s setup into 2025 to 2027.

Analyst Commentary

Bullish analysts have been steadily lifting their price targets on MKS, highlighting improved execution across core segments and a stronger multiyear earnings trajectory. Recent target hikes into the mid to high $100s reflect growing conviction that the company can outperform prior cycle peaks on both revenue and margin metrics.

The latest research notes emphasize that upside is being driven by a combination of better than expected demand trends, continued cost discipline, and an increasingly supportive capital spending backdrop in key semiconductor end markets. Together, these dynamics are reinforcing confidence that MKS can sustain above trend growth and justify a higher valuation multiple relative to its historical range.

Bullish Takeaways

• Multiple bullish analysts have raised price targets into a $168 to $175 range, signaling increased confidence that MKS can compound earnings at a faster pace and support a higher fair value than previously assumed.
• Recent beat and raise performance in the Electronics and Packaging business is being framed as an early indication that the company can deliver upside to revenue and margin expectations into 2026 and 2027.
• Improving wafer fab equipment and DRAM investment trends are viewed as powerful cyclical tailwinds that should support double digit growth in the Semiconductor segment, underpinning the case for multiple expansion.
• Bullish analysts describe the 2025 to 2026 outlook as a solid baseline scenario with potential upside, particularly if AI related computing demand and packaging investments track ahead of current conservative assumptions.

What's in the News

• MKS issued fourth quarter 2025 guidance, targeting revenue of approximately $990 million, plus or minus $40 million, with GAAP net income of $96 million, plus or minus $29 million, and GAAP diluted EPS of $1.42, plus or minus $0.42 (company guidance).
• The company reported no share repurchases between July 1, 2025 and September 30, 2025, and confirmed completion of its long running buyback program with a total of 3,133,716 shares repurchased for $172.26 million since the authorization announced on July 27, 2011 (company buyback update).

Valuation Changes

• Fair Value Estimate has risen significantly from approximately $152.52 to $200.00 per share, reflecting a meaningfully higher long term outlook.
• Discount Rate has edged up slightly from 12.32% to about 12.37%, implying a modestly higher required return embedded in the valuation model.
• Revenue Growth has been raised from roughly 7.24% to about 8.69%, indicating expectations for a stronger long term top line trajectory.
• Net Profit Margin has increased from about 11.10% to approximately 12.05%, pointing to anticipated operational leverage and improved profitability.
• Future P/E has expanded from roughly 27.8x to about 31.6x, signaling a higher assumed valuation multiple on forward earnings.