Inphi Corp (IPHI-US) - Initiate with Buy and $157 PT

Key Points

• IPHI initiation: Buy with $157 price target; core communication revenue (90%+ of total) growing 20-40% organically through 2022
• Attractive organic growth across all key product areas; sustainable growth began Dec 2018/March 2019 (not just COVID-driven 2020 dynamics)
• Expanding margin model demonstrates optical value and scale economics through growth
• Strong balance sheet: $976M total assets, $422M cash, 105 days inventory; $476M convertible debt ($217.5M in current liabilities)
• Thesis: "These Optics Are Fantastic" - optical products enabling data center interconnect growth with expanding margin trajectory

Summary

Loop Capital initiation on Inphi with strong fundamental picture. Emphasizes attractive core communication organic growth (20-40% through 2022), expanding margin model demonstrating optical economics, and healthy balance sheet. Positions IPHI as optical networking play benefiting from data center growth.

Source

• File: IPHI_ Loop_initiation_23_Jul_2020.pdf
• Location: Dropbox/2. Semi/Networking/Inphi/
• Pages: 32

Related

• _MOC-networking | IPHI | Optical-Networking | Datacenter | Margins