ALAB: No Sophomore Slump Here
Key Points
- Strong beat and raise in second quarterly report as public company
- Aries content increasing on next-gen AI platforms, including NVIDIA Blackwell
- Multiple design wins in Blackwell family, including GB200
- Taurus 400G SCM ramps expected across multiple AI and general compute platforms
- 800G SCM ramping late 2025
Key Takeaways
- Aries content moving higher on next-gen platforms (Blackwell/GB200)
- Ramps on internally developed AI accelerators at hyperscalers driving further Aries retimer growth
- Taurus 400G/800G should contribute meaningful revenue growth in 2H24 and 2025
- Aries SCMs ramping for AI accelerator back-end networks
Estimate Changes
- Estimates raised across FY24, FY25, FY26
- DCF valuation model with multiple compression applied
- PT lowered to $65 (from $85) to reflect likely valuation compression
Price Target & Valuation
- New PT: $65 (from $85)
- Valuation compression expected despite strong fundamentals
- Recent multiple compression reflected in revised DCF
Market Cap & Valuation Metrics
- Market cap: $6.6B at $42.48 price
- P/E: 72.9x (FY24E), 52.1x (FY25E), 37.1x (FY26E)
- Revenue growth: 201.9% (FY24), 43% (FY25), 35% (FY26)
- Operating margin expansion: 26.6% → 29.9% → 35.4%
Source
- File:
ALAB-Needham-7Aug2024.pdf - Location: Dropbox/2. Semi/Networking/ALAB/
Related
- ALAB | _MOC-networking
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