ALGM — Credit Suisse Initiation (Nov 2020)
Key Points
- Initiate ALGM with Outperform rating; establish CY21/22 EPS of $0.52/$0.70 driving a $27 Target Price
- Core IP in Magnetic Sensors and Power ASICs with optionality in LiDAR (Light Detection and Ranging)
- Most levered Semis to Autos (~70% of revenue versus 15-20% semi industry average)
- Long duration end markets in Auto/Industrial (~85% of revenue) with 3+ year design cycles followed by 7+ years of highly visible revenue streams
- Accelerating content in Auto from ~5% CAGR to 7-9% CAGR, allowing ALGM to grow Auto revenue at 10-15% CAGR
Business Model
- Three core areas: (1) Magnetic sensors, (2) ASIC analog power ICs, and (3) LiDAR
- Heavy automotive/industrial exposure with long product cycles and visible visibility
- Design cycle to revenue ramp: 3+ years design followed by 7+ years revenue visibility
Valuation & Target
- Target Price: $27.00 (12-month)
- Rating: Outperform
- CY21E EPS: $0.52
- CY22E EPS: $0.70
Source
- File:
ALGM-CS-_23Nov2020.pdf - Location: Dropbox/2. Semi/_Individual Stock/1. Semis/1. Automotive/ALGM/
- Date: November 23, 2020
Related
- ALGM
- ALGM-Needham-initiation-nov2020
- Magnetic Sensors
- Power ASICs
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