PDF Solutions Posts Record Q3, With Aurora, eProbe as Key Catalysts in 2027, Morgan Stanley Says

10:35 AM EST, 11/06/2026 (MT Newswires) -- PDF Solutions (PDFS) delivered record Q3 revenue and a strong earnings beat, with margins reaching long-term targets well ahead of schedule, while Aurora and eProbe are expected to be key product catalysts in 2027, Morgan Stanley said Friday in a note. PDF Solutions reported Q3 revenue of $68.3 million, slightly below consensus of $70 million. Gross margin rose to 77%, while EPS of $0.40 beat the Street consensus of $0.33. The brokerage identified four primary drivers for next year, including backlog conversion, the sustainability of the margin step-up, continued momentum in Cimetrix runtime-licenses and eProbe engagements at leading-edge semiconductor fabrication plants, according to the note. Aurora deployments and customer partnerships are expected to support medium-term growth and margins. While some big contracts may slip into Q1, the overall outlook for next year remains strong, the brokerage said. Morgan Stanley lowered its 2027 EPS estimate to $1.70 from $1.77. Morgan Stanley kept an overweight rating on PDF Solutions and lowered its price target to $60 from $62. Price: 34.40, Change: -0.12, Percent Change: -0.35