Is AXT’s (AXTI) Narrowing Losses a Sign of a Turning Point in Its Growth Story?

• AXT, Inc. recently reported its third quarter 2025 results, showing sales of US$27.96 million and a net loss of US$1.91 million, alongside guidance for fourth quarter revenue between US$27 million and US$30 million with an expected GAAP net loss of US$0.03 to US$0.05 per share.
• These updates reveal reduced losses and stronger sales compared to the previous year, offering investors a clearer picture of AXT’s ongoing operational progress.
• We'll examine how AXT's improved year-over-year results and updated guidance may shift its growth outlook and investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

AXT Investment Narrative Recap

To be an AXT shareholder, you need to have conviction in the company's ability to convert operational momentum, visible in rising sales and lower quarterly losses, into sustainable earnings as market demand for high-speed optical and compound semiconductor substrates accelerates. The latest results and Q4 guidance reinforce this theme, but do not fundamentally alter the main short-term catalyst: easing export permit challenges, nor the central risk surrounding margin pressures and customer concentration.

Among company developments, the Q3 2025 earnings release stands out as most relevant, AXT’s reported US$27.96 million in sales shows sequential and year-over-year improvement, supporting the narrative that recovering end-market demand for substrates could drive top-line growth if export hurdles remain manageable. However, persistent net losses and cautious Q4 guidance signal that margin recovery and profitability remain uphill battles.

Yet, beneath these improvements, it’s the unresolved margin compression that investors should watch, as...

Read the full narrative on AXT (it's free!)

AXT's narrative projects $117.8 million revenue and $16.6 million earnings by 2028. This requires 11.0% yearly revenue growth and a $40.6 million earnings increase from -$24.0 million today.

Uncover how AXT's forecasts yield a $3.82 fair value, a 52% downside to its current price.

Exploring Other Perspectives

Simply Wall St Community members see fair values for AXT between US$3.82 and US$5.70, based on two independent estimates. Your outlook may shift, especially considering how ongoing pressure on AXT’s gross margins could influence both future profitability and share price direction, review how others weigh these factors in their assessments.

Explore 2 other fair value estimates on AXT - why the stock might be worth as much as $5.70!

Build Your Own AXT Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your AXT research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free AXT research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AXT's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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