From reviewing the Q3 earnings and removing the 1 time currency gain and applying the more normal 30% tax rate. AXT at 17M revenue makes a wooden nickel in earnings. Only one analyst is tracking them, but even he estimates their revenue will growing significantly in 2010 over 2009.

Every 1M in revenue AXT can generate, if they can maintain the 30+% margins will net them about 2/3rds of a penny in earnings, assuming their 30% tax rate and 31.7M diluted shares (I assume they will have some option grants for the new executives in Q4 or early 2010).

So right now, we are looking at a base of 20 cents in 2010 earnings plus 0.66 cents per extra 1M in revenue they can generate. Given the current revenue estimates of the one analyst, that would equate to about another nickle in earnings, or roughly 25 cents for the year. With a 30 P/E that should make $7.50, or its recent multi-year high as a likely price target for 2010. If revenue shows a faster growth rate, which we can likely see in Q4 earnings, then one can move up from there, or down.