Stock Analysis & Valuation Memscap, S.a. (MEMS.PA)

• Previous Close: €4.12
• Sector Valuation Confidence Level: Low

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	149.87	3538
Intrinsic value (DCF)	1.72	-58
Graham-Dodd Method	3.28	-21
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

MEMSCAP, S.A. (MEMS.PA) is a leading provider of micro-electro-mechanical systems (MEMS) solutions, catering to high-growth industries such as aerospace and defense, optical communications, medical and biomedical, and IT/consumer markets. Headquartered in Crolles, France, MEMSCAP specializes in pressure sensors, transducers, and switches used in critical applications like air data computers, engine control, and medical implants. The company also offers optical MEMS chips for telecommunications and multi-user MEMS processes (MUMPs) for research and industrial prototyping. With a strong focus on innovation, MEMSCAP serves Fortune 500 companies, high-tech industries, and academic institutions globally. Founded in 1997, the company has established itself as a niche player in the semiconductor sector, leveraging MEMS technology to deliver precision-engineered solutions for demanding environments. Its diversified product portfolio and custom manufacturing services position it well in the rapidly evolving MEMS market.

Investment Summary

MEMSCAP presents a specialized investment opportunity in the MEMS semiconductor space, with a market cap of €27.4 million and a beta of 0.858, indicating lower volatility than the broader market. The company reported €12.7 million in revenue and €1.4 million in net income for the latest fiscal period, with diluted EPS of €0.18. While its operating cash flow of €548,000 is positive, the modest scale and capital expenditures (-€206,000) suggest limited near-term growth potential. The absence of dividends may deter income-focused investors, but MEMSCAP’s niche focus in aerospace, medical, and optical MEMS could appeal to those bullish on industrial and defense applications. Risks include reliance on a few key industries and competition from larger semiconductor players. The company’s €3.96 million cash position against €5.05 million in debt warrants monitoring.

Competitive Analysis

MEMSCAP operates in the highly competitive MEMS semiconductor market, where it differentiates itself through specialized pressure sensors and optical MEMS solutions for aerospace, medical, and telecommunications. Its competitive advantage lies in its deep expertise in MEMS fabrication, particularly in custom and low-volume production runs, which larger semiconductor firms often overlook. The company’s MUMPs platform is a key asset, serving research institutions and prototyping needs. However, MEMSCAP faces stiff competition from larger players with greater R&D budgets and economies of scale. Its focus on high-margin niche applications helps mitigate some pricing pressures, but the lack of diversification beyond MEMS could be a vulnerability. The company’s small size limits its ability to compete for large-scale contracts, but its agility and technical proficiency in bespoke MEMS solutions provide a defensible position in targeted markets. The aerospace and medical segments, with stringent quality requirements, align well with MEMSCAP’s strengths.

Major Competitors

• STMicroelectronics N.V. (STM.PA): STMicroelectronics is a global semiconductor leader with a strong MEMS portfolio, including sensors for automotive and consumer electronics. Its scale and broad product range overshadow MEMSCAP’s niche focus, but STM’s emphasis on high-volume markets limits its presence in specialized MEMS applications where MEMSCAP competes.
• Roche Holding AG (ROG.SW): Roche is a dominant player in medical devices, including MEMS-based diagnostic tools. While not a direct competitor in MEMS fabrication, Roche’s vertical integration in medical sensors poses a long-term threat to MEMSCAP’s medical MEMS business, particularly in implantable sensors.
• Broadcom Inc. (AVGO): Broadcom’s optical communications division competes indirectly with MEMSCAP’s optical MEMS chips. Broadcom’s vast resources and integrated solutions give it an edge in telecom, but MEMSCAP’s focus on custom MEMS components allows it to serve specialized needs that Broadcom may not prioritize.
• Honeywell International Inc. (HON): Honeywell is a key competitor in aerospace sensors and pressure measurement systems. Its global reach and entrenched relationships with aerospace OEMs challenge MEMSCAP’s position, though MEMSCAP’s agility and customization capabilities offer differentiation in niche applications.