Updated Aug 13 at 11:17am ET.
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Bernstein set a target price of $62 for the stock, which is about 25 percent lower than the current price. This outlook is more cautious than the broader group of analysts, who have an average target of $105. A price target is what an analyst thinks a stock will be worth in the future. While this specific target is low, it is just one firm's view and does not change the company's focus on selling power chips for electric cars and AI data centers.
Source: Bernstein
Truist Financial has set a price target of $91 for the stock. This is significantly lower than the average analyst target of $112, though it still sits above the current price of about $77.
While the firm is less optimistic than its peers, the target suggests they see some room for the stock to rise from here. For long-term owners, this is a more conservative take on the company's path to recovery as it waits for the car and industrial markets to pick back up.
Source: Truist Financial
The company reported quarterly revenue of $1.6 billion, up 9 percent from a year ago and slightly ahead of what analysts expected. Profits came in at $0.74 per share, also beating the $0.71 estimate. The business is seeing a lift from AI data centers, which need specialized chips to manage high levels of power.
Management also gave an outlook for next quarter that was higher than expected. While the market for car and industrial chips has been in a slump, the growth in AI applications is starting to offset that weakness. The company also generated about $425 million in cash after paying for its operations and equipment, a big jump from last year that allowed it to buy back $332 million of its own shares.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Bank of America expressed confidence in the company's plan to buy Synaptics, a firm that makes chips for human-interface and computer processing. The analysts believe this move adds "compute" technology, the brain of a device, to the company's existing strengths in power and sensors.
This matters because it helps the company move toward its goal of offering a complete package of chips for "edge AI," which are devices that process AI tasks locally rather than in a distant data center. If successful, this could make the company a more vital partner for makers of smart industrial and consumer gear.
Source: Proactive Investors
The company has agreed to sell two of its manufacturing facilities. This is part of a broader strategy to become more efficient by owning fewer, larger factories rather than many smaller ones.
By divesting these plants, management aims to lower its fixed costs and improve profit margins, which have been under pressure during the current industry slowdown. For long-term owners, this is a sign the company is focused on running a leaner operation that can earn more profit on every dollar of sales when demand eventually returns.
Source: Reuters
Analysts issued a flurry of updates following the company's recent earnings report. Most analysts, 24 of 47, rate the stock a buy, and the average target of $105 suggests a potential 24% gain from the current price.
Management has a habit of setting a bar they can clear, beating expectations in six of the last eight quarters even while navigating a cooling car market.
| Expectation | |
|---|---|
| EPS | $0.90 |
| Revenue | $1.70B |
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