• If you are looking at Photronics and wondering whether the current share price still offers value, the key question is how that price compares with what the business may be worth.
• The stock last closed at US$36.25, with returns of 15.4% over 7 days, 5.3% over 30 days, 8.5% year to date, 51.4% over 1 year and 93.4% over 3 years. This naturally raises questions about how much optimism or risk is now reflected in the price.
• Recent coverage of Photronics has focused on its position in the semiconductor supply chain and how investor attention on chip related businesses has affected sentiment around the stock. This context helps explain why the share price performance has drawn more interest from investors who are trying to understand whether expectations have shifted.
• On our checks, Photronics currently has a valuation score of 3 out of 6. This suggests some measures point to the shares looking inexpensive while others are more mixed. In the next sections we will compare different valuation approaches before finishing with a way to bring them together into a deeper view of the stock.

Approach 1: Photronics Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those back to today to reflect the time value of money and risk.

For Photronics, the model used is a 2 Stage Free Cash Flow to Equity approach, based on last twelve month free cash flow of about $101.1 million. Simply Wall St has extended analyst style projections, with estimated free cash flow figures between 2026 and 2035 ranging from about $95.6 million to $105.2 million, all expressed in $. These ten year estimates are then discounted using the model assumptions to arrive at a total present value.

Putting those cash flows together, the DCF model suggests an intrinsic value of about $19.13 per share, compared with the recent share price of $36.25. That implies the stock is viewed as around 89.5% overvalued using this specific framework, so on this measure the market price sits well above the model estimate of worth.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Photronics may be overvalued by 89.5%. Discover 883 undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Photronics Price vs Earnings (P/E)

For a profitable business like Photronics, the P/E ratio is a useful way to think about value because it links what you pay per share to the earnings that the company is currently generating.

What counts as a “normal” P/E often reflects how fast earnings are expected to grow and how risky those earnings are. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually support a lower one.

Photronics currently trades on a P/E of 15.7x. That sits below the Semiconductor industry average of 43.9x and also below the peer group average of 62.4x. Simply Wall St’s Fair Ratio for Photronics is 23.2x. This Fair Ratio is a proprietary estimate of what a more appropriate P/E might be, given factors such as earnings growth characteristics, profit margins, industry, market cap and company specific risks.

Compared with simple industry or peer comparisons, the Fair Ratio aims to be more tailored to the company’s own profile rather than assuming it should trade exactly in line with the group. With the current P/E at 15.7x compared with a Fair Ratio of 23.2x, this framework suggests the shares look undervalued on an earnings multiple basis.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Photronics Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives.

A Narrative is your story about a company, where you spell out what you think is realistic for its future revenue, earnings and margins, then connect that to a fair value that makes sense to you.

On Simply Wall St, Narratives sit inside the Community page and turn this story into a clear financial forecast and fair value. They are then kept updated automatically when fresh news or earnings are released.

This means you can compare your Fair Value with the current Photronics share price and use that gap, whether you see it as large or small, to help decide if you want to buy, hold or sell.

For example, one Photronics Narrative on the Community page could assume a relatively conservative fair value, while another assumes a much higher fair value, reflecting how different investors interpret the same data.

Do you think there's more to the story for Photronics? Head over to our Community to see what others are saying!

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.