The stated view
A base-case fair value against the price
An Ohio-incorporated producer of high-performance advanced engineered materials, established in 1931, that generated $1.8 billion in net sales in 2025. Through its subsidiaries it supplies electrical, electronic, thermal and structural materials to semiconductor, industrial, aerospace and defence, and automotive customers.
The base case values the shares at $168.53 against a $245.22 price. The gap is what the market is already paying for, so the memo's job is to say whether the evidence supports it.
Base fair value
$168.53
DCF and relative
Current price
$245.22
52-wk $108.62 to $297.39
Gap
-31%
embedded expectations
Working material, not a recommendation. ABI Nexa research, from company filings.
What is priced in
The snapshot and the multiples
The cost of equity is built from cited inputs, and the market snapshot shows how much the price already assumes, so a disagreement lands on a specific number rather than a feeling.
$6.7B
Market cap
enterprise value $7.1B
27M
Diluted shares
price $245.22
Valuationas filed
| Measure | Value |
|---|
| Price / earnings | 68.5x |
| EV / EBITDA | 39.6x |
| EV / Sales | 4.0x |
| Price / book | 5.9x |
| Cost of equity | 9.6% |
Cost of equity is risk-free 4.71% plus beta 1.10 times an equity risk premium of 4.42%. ABI Nexa research.
Bull and bear
What you need to believe
The memo states both cases explicitly, each drawn from the filings, so the debate stays on the evidence rather than the narrative.
Bull case
Q2 2026 marked record quarterly value-added sales, adjusted EBITDA and adjusted EPS, with every segment growing sales double digits and adjusted EBITDA margin above 23% of value-added sales for the first time in company history. Backlog exited the quarter up roughly 30% year over year and about 20% since the start of the year, giving management the confidence to raise full-year guidance.
Bear case
The price already embeds that record. At 68.5x earnings and 39.6x EV/EBITDA the shares trade roughly 45% above a base-case fair value of $168.53, so any slip in backlog conversion, margin or end-market demand has little cushion.
Bull case cited to the Q2 2026 earnings release, accession 0001104657-26-000042. Working material, not a recommendation.
Catalysts and read
What moved on the print
1
FY26 revenue guidance upgraded to low double-digit
From mid-single-digit-plus (12 Feb 2026) to low double-digit growth. Adjusted EPS guide $6.00 to $6.50 affirmed with a tilt to the upper end. The CFO flagged a 15% to 20% EPS step-up next quarter, with more meaningful step-ups in the back half.
2
Record backlog, defense order book inflected
Backlog at an all-time high, up 20%+ YoY and 15% year to date. Q1'26 defense bookings $60M, a record first quarter; trailing A&D order rates up 50%. Management cited $300 million-plus open RFQs against $200M at the Q4'25 call.
3
Electronic Materials margin record, AI tailwind confirmed
EM Q1'26 adjusted EBITDA margin hit a record 28.3% on $91.6M of value-added, up 18% YoY. High-performance memory and data-storage sales up 47% YoY; semiconductor value-added $79.5M, total semi orders up 16% YoY and 40% ex-China.
4
$65M customer-funded beryllium capacity expansion
A major U.S. defense prime is funding a $65M expansion of beryllium production across two facilities, completing Q4'27 and enabling sustained double-digit precision-materials growth from 2028. The mid-2025 Korea Konasol acquisition qualifies in the second half of 2026.
5
Stock up 18.7% post-print
Shares rallied from $185.89 pre-print (24 Apr) to $220.75 (5 Jun), a +18.7% move; one-year total return +165% from $83.19.
Bottom line for the IC: the thesis upgrades from a recovery story with margin expansion and AI optionality to one with margin expansion, AI confirmed and record defense visibility. The risk shifts from cyclical timing to multiple discipline above $220.
Cited to the Q2 2026 earnings release and call. ABI Nexa research.
End-market exposure
Value-added by market, with management's read
Where the value-added revenue sits by end market, from the Q1'26 disclosure, with management's own forward direction for each.
End-market forward exposure, Q1'26value-added, $M
| End market | Q1'26 VA | % of VA | 2026 direction |
|---|
| Semiconductors, incl. AI infra | 79.5 | 30% | Mid/high single-digit+ |
| Aerospace & Defense | 52.5 | 20% | Mid/high single-digit |
| Industrial | 36.7 | 14% | Low single-digit |
| Energy, incl. new energy | 31.4 | 12% | Mid single-digit |
| Life Sciences | 26.2 | 10% | Low/mid single-digit |
| Consumer Electronics | 23.5 | 9% | Low single-digit |
| Automotive | 11.7 | 5% | Below zero |
| Total value-added | 261.8 | 100% | Net mid/high single-digit+ |
Directions are management's own, from the Q1'26 disclosure. ABI Nexa research.
Transcript language evolution
How the tone shifted over twelve quarters
How management's prepared remarks and Q&A tone shifted across eight strategic themes over the trailing twelve earnings calls, from Q2 2023 to Q1 2026. Each cell encodes the prevailing direction of that quarter's framing.
| Theme | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 3Q24 | 4Q24 | 1Q25 | 2Q25 | 3Q25 | 4Q25 | 1Q26 |
|---|
| Defense / Aerospace | | | | | | | | | | | | |
| Semiconductor / AI | | | | | | | | | | | | |
| Beryllium positioning | | | | | | | | | | | | |
| Precision Clad Strip / PMI | | | | | | | | | | | | |
| Margins / profitability | | | | | | | | | | | | |
| Backlog / order book | | | | | | | | | | | | |
| M&A / capital allocation | | | | | | | | | | | | |
| Macro / end-market headwinds | | | | | | | | | | | | |
StrengtheningPositive, steadyMixedHeadwindNot mentioned
Most positively trending
Margins and profitability, the cleanest uninterrupted upward arc: a 20% mid-term target in 2023, achieved by Q4'24, raised to 23%, then an EM record of 28.3% by Q1'26. Runner-up is defense, with the RFQ pipeline growing from $100M to $300M-plus.
Most negatively trending
Precision Clad Strip and PMI: fully ramped in Q4'23, an inventory correction by Q4'24, repeated delays through 2025 and a quality event idling facilities in Q4'25, then a cautious Q1'26 recovery. Runner-up is macro and China.
New language first heard in Q1'26
"Critical enabler of the AI ecosystem, not at the edges, but at the core", "$300M-plus open RFQs" in defense, "A&D order rates up 50%", memory and data storage "up 47% YoY", and "highest backlog in company history".
Language faded since 2023
"Inventory correction" and "destocking" now confined to clad strip and China; the "20% EBITDA mid-term target" retired in Q4'24; "M&A not a priority" softened after Konasol; the "Phase 2 clad strip ramp" replaced by remediation framing.
Derived from twelve quarters of earnings-call transcripts. ABI Nexa research.
Intelligence OS
