Q3 23: automotive end-market won’t disappoint next year

STMicroelectronics published its Q3 figures which were above market consensus, supported largely by the automotive segment which is set to grow organically in FY24 as well, as highlighted by the management during the conference call. However, the company has guided for a weaker than expected Q4 since the level of orders materialising in the industrial end market in Asia was below expectations in Q3.

Q2 23: Automotive end-market still steady

STM published Q2 figures in line with the consensus. Net revenues were up by 13% yoy to $4.33bn, with a 49% gross margin. We were positively surprised by the Automotive and Discrete group’s resilience, registering a 34.4% increase yoy and 8.2% increase qoq. On the other hand, the AMS segment (which includes Memory end market) registered a 16% yoy decline and was 9% below the market’s expectations. For Q3 STMicroelectronics guided for net revenue of $4.38bn and a gross margin of 47.5%, in line wi

Strong Q1 results but automotive end-market worries drag the share price down

STM published great Q1 results beating the market consensus. The management re-iterated its guidance for FY23 and FY25 while hinting at some slight caution for H2 23, to which the market reacted negatively. We believe that, due to its strong backlog, STMicroelectronics will be able to achieve its targets and, over the course of the next few months, the share price should recover.

Q3-22: the first signs of semiconductor demand softening

STM delivered a strong set of Q3 results, beating expectations. However, the softer outlook for its Q4, which is expected to be flattish sequentially, has justly frightened the market. STM still expects growth in FY23 thanks to its resilient exposure to the Auto and Industry end markets. AMS will be softer however and, as it has been one of STM’s most profitable divisions, this will impact the gross margin going forward.

Q2-22: Forget any downside scenario until H2-23

STM again astounded the market with a stunning set of results and increased guidance. As expected, Auto and Industry were the main drivers for the sales growth in Q2. But surprisingly, despite the global concerns of a strong decrease in demand for smartphones, STM is expecting Q3 growth to be driven by AMS, the division most exposed to personal electronics. STM’s backlog is massive, and the pricing environment is still favourable. All the lights are green.

Tomorrow is uncertain, but the days after will be delicious

STM has provided its long-term strategy until 2025-27. Through its wide bandgap products, the improvement in the manufacturing mix to 300mm, and growth generated through the well-known secular trends of Electrification and Digitalisation, STM has provided optimistic figures that should restore investors’ confidence on the stock. The sales CAGR is highly volatile, but the profitability levels are expected to reach record highs with a strong cash generation.

Q1 22: no headwinds will prevent FY22 from being a record year

STM has reported extremely strong results. It has managed to beat all metrics of the consensus, with impressive margins related to a still favourable pricing environment. Its massive capex roadmap is being implemented according to guidance. The FY22 outlook seems increasingly conservative.

Q4 21: no doubt STMicro is undervalued

Though STMicroelectronics had already warned the market earlier in January that its sales would be 5% above guidance, both the profitability of the current quarter and the outlook are jaw-dropping. The nearly doubling of capex for FY22 suggests that the semiconductor shortage is far from over. An interesting entry point…

Q3 21: price and volume to boost profitability

STMicroelectronics has published strong results. The Q3 results came broadly in line with consensus, and slightly better in profitability. The positive news comes from the rise in the sales guidance and in the Q4 expected gross margin, to its highest level. Supply constraints in Malaysia due to the pandemic continue to be a headwind.

Q2 21: better forecast as demand stays strong

STMicroelectronics published very impressive results and bettered their outlook for FY21. There is strong growth in demand from all end-segments, which increases sales and margins for the coming quarters. STM is working on increasing capacity to answer the current demand.

Solid Q1 21 results and very reassuring guidance

STMicroelectronics has shown solid figures, boosted by its Automotive and Industry segments. The demand for its chips is still strong as customers want to replenish their inventories. The rumour about Apple replacing STMicroelectronics as a supplier made the stock price hesitate in past weeks, and the guidance has restored confidence.

Q4 20: strong final quarter and an encouraging outlook for 2021

ST released its Q4 20 figures, which were in line with preliminary estimates for revenue, and consistently above estimates for the profitability figures as these were fuelled by strong demand in almost every product category (except for RF Communications). Q1 20 guidance is above consensus, while the most promising figures are at the capex level, which were well above the street.

CMD 2020 : an unfortunate reset

ST held the fourth presentation of its 2020 CMD focusing on its strategic update. Overall, the predominant feeling was somewhat of deception as the revenue guidance suffered from US/China trade tensions beyond previous estimates, amongst the negative market evolution. This will put pressure on margins for the next three years. Nonetheless, we maintain a positive opinion in the longer run as we believe the company could overcome this challenge organically through strategic adaptations or M&As.

Q3 20: nothing exciting in Q3 but better Q4 outlook

STM’s Q3 results were roughly in line with estimates, with a marginal disappointment for the bottom line. Nothing exciting at this stage, apart from the better outlook for Q4 which may exert upwards pressure on the consensus. We maintain our positive view on the stock.

Reassuring comments from the CEO

Jean Marc Cherry, STMicroelectronics’ CEO, spoke at Citi’s 2020 Global Technology Virtual Conference today (09/09/2020). Overall, the message provided by the CEO was very reassuring, with STM reconfirming each of its financial targets for FY20 as well as mid-term objectives. In addition, the company is seeing improving signs in both the automotive and industrial end markets.

Audioboom Group - Q1 24 revenue growth of +11%, FY24E forecasts reiterated

Audioboom’s FY23 results and Q1 trading update show Q1 24 revenue growth of +11% yoy, $6.7m of March 2024 revenue marking the platform’s highest revenue month since May 2022, and a confident outlook that leads us to reiterate our FY24E forecasts. Following the focus on new initiatives through FY23, the platform is now in its strongest ever operational position, with a record 1.1bn monthly ad impressions created in March 2024, record global audience reach of 38.6m unique global listeners in Janua

Alphawave Semi: FY23 trading update, amended forward guidance

Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H

Crimson Tide - FY23 reports +15% revenue; investment phase complete

Crimson Tide has reported FY23 results to December in line with expectations, with additional operating leverage benefitting updated FY24 and maiden FY25 and FY26 forecasts. FY23 delivered +15% revenue growth to £6.2m at 86% GM, of which over 90% is recurring, and maintained £5.8m ARR even after unexpected customer churn in the year as we previously noted. Crucially, the Group achieved milestone adj EBITDA profitability of £0.4m at 7% EBITDA margin, and edges closer to adj PBT profitability expe

Morning Note – 16 April 2024

Morning Note – 15 April 2024

Checkit - New product launch and contract wins

Checkit has won contracts with two customers worth at least £417k over the three-year lives of the contracts, confirming its ability to upsell to its existing customer base and supporting our forecasts. Having trialled the new technology with multiple customers, Checkit has launched its Asset Intelligence module, which uses advanced analytics and machine learning to enhance customer sustainability, reduce costs and increase revenue.

Soft growth patch

Auction Technology Group - H1/24 Trading update

ATG’s H1/24 trading statement indicates revenue for the six-month period to 31 March 2024 was $86m, a 6% increase on H1/23 (1% organic growth), helped by the addition of the EstateSales.Net (ESN) marketplace last year, which performed well in the period. Total marketplace revenue increased 2% (organic), driven by growth in value-added services (VAS) and event fees, offsetting a decline in commission revenue (mainly through lower asset prices).

Devolver Digital (DEVO LN) - Rebuild year

Devolver Digital encouragingly delivered 2023 results slightly ahead of expectations and provided a steady medium-term outlook that leads us to reiterate our 2024 Adjusted EBITDA estimates. Longer term, the company is now planning to further develop its two major planned titles, Human Fall Flat 2 and System Era's next major new release. We now expect those major titles to be released in 2026 rather than 2025, meaning we lower our 2025 Adjusted EBITDA forecast to $10.6m from $17.6m but introduce

Morning Note – 17 April 2024

Touchstar - Full year results: Recurring revenue strategy delivers further profit growth

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning's full year results reflect the outcome of a multi-year strategy coming to fruition for the group, with recurring revenue growth of 8.7% delivering overall revenue growth of 7.1% and in turn a 60% increase in PBT to £0.7m. Over the past few years, Touchstar has focused on enhancing the returns from their product offering through a shift towards recurring software licen

It’s not what you sell, it’s the way that you sell it

This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored.  We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.

Engage XR Holdings - Expanding from FY23, FY24E forecasts reiterated

ENGAGE XR’s FY23 results show revenue and net cash in line with the February trading update, EBITDA ahead at -€4.0m vs -€4.5m due to the split of cash outflow between opex and working capital, and a confident outlook that leads us to reiterate our FY24E forecasts. FY23 revenue for the core ENGAGE platform was unchanged vs FY22 at €3.3m, as H2 23 revenue was impacted by the record seven-figure contract announced in February shifting to 2024, and several enterprise customers scaling back renewals

Initial Equity Trading Comments - 19 February 2024

FY23 results in line – and a flying start to FY24

ENGAGE XR has published its FY23 full year results, the headlines of which reflect the details provided in February’s post close trading update in terms of revenue, EBITDA loss and net cash. ENGAGE XR has signed a rapidly growing number of strategic and commercial partnership agreements with companies invested in promoting the VR medium and the development of corporate metaverses.