MKS Inc.

Shortcut’s reasoning.

Guidance (5-Aug-26): revenue $1,350M ±$40M, non-GAAP EPS $3.58 ±$0.31; MKS beat its own EPS midpoint in all six quarters 1Q25–2Q26 (avg +$0.26) and revenue midpoint by ~$40M on average. Model assumes a smaller ~$25M revenue beat — segment build VSD +18% / PSD +5% / MSD +8.8% Q/Q product growth, cross-checked to end markets (semi +$12M, SI +$5M vs guide; E&P balancing at ~+$8M) — at 47.1% GM and $282M non-GAAP opex.

Mechanical share-count tailwind: guidance used 71.8M non-GAAP diluted shares (implies ~$419 avg price); actual 3Q26 average close was $295.41, so convert dilution net of capped calls falls to ~1.8M and non-GAAP diluted shares to ~69.98M (≈ +$0.10 EPS vs guidance basis). Model calibrates to reported 1Q26/2Q26 capped-call offsets within 0.02M.

Peer Sept-quarter prints were strong: Lam +22% Q/Q record revenue, KLA beat midpoint, UCT +18% Q/Q, Entegris +25% Y/Y, TTM +60% Y/Y with 2.13 book-to-bill — supports semi and E&P at/above guidance; the 3Q26 stock slump was sector/valuation-driven (no company pre-announcement).

Downside tested: parts shortages (Lam/Ichor), 50–80bp GM drag from Penang/Guangzhou ramps, mix (VSD, chemistry equipment), lower palladium pass-through and weaker EUR; a guide-midpoint outcome with 69.98M shares still gives ~$3.67.

Frozen consensus $3.65 (13 estimates) sits only $0.07 above the guidance midpoint; estimate $3.80 (+4%). Starting P(beat) 0.874 (large-cap prior 0.78, 6/6 beats) trimmed to 0.85 for model and supply risk.