In today’s briefing:
- [ACM Research (ACMR US, BUY, TP US$30) Earnings Review]: Korea and US Are the Next Battlefields
- Duolingo: Rich Valuation and Limited Upside Despite Better Than Expected 3QFY23 Results
- Investors Have Been Buried Their Head in The Sand on Billions of Unrealized HTM Losses
- IPAR: Sales Trajectory Ahead of Estimates
- SES AI Corp. – 3Q23 Results
[ACM Research (ACMR US, BUY, TP US$30) Earnings Review]: Korea and US Are the Next Battlefields
- ACMR reported C3Q23 revenue, non-GAAP EBIT, GAAP net profit (5%), 21%, in-line vs. our est., and (3%), 63%, 49% vs. cons., respectively. Gross margin beat by +9ppts due to FX.
- ACMR received a second order from a U.S. semiconductor maker, which indicates potential for significant market share gain by 2025. SK Hynix is engaging its entire product line, per management.
- We maintain BUY rating and US$ 30 TP, implying 18x FY23 EV/Earnings.
Duolingo: Rich Valuation and Limited Upside Despite Better Than Expected 3QFY23 Results
- Duolingo reported stronger than expected 3QFY23 results, including revenues of $137.6M (consensus: $132.2M) and net income of $2.8M. The company raised guidance for FY23 revenues and total bookings.
- Stock indicated up ~9% after hours. Duolingo beat all key estimates. However, ABPDAU declined to $25.38, while net new ARR growth will slow in 4Q and the next fiscal year.
- With a market cap of ~$8.2B on a fully diluted basis, Duolingo shares trade at ~14x and ~11x EV/Rev on my respective FY23/FY24 estimates, a significant premium to comparable companies.
Investors Have Been Buried Their Head in The Sand on Billions of Unrealized HTM Losses
- Unrealized HTM losses continued to balloon as interest rates crept higher.
- What has caused SVB’s demise seems to have now been forgotten and ignored by investors.
- We took a deep dive into 3 U.S. Banks, First Foundation, Wells Fargo and Bank of America on their HTM losses.
IPAR: Sales Trajectory Ahead of Estimates
- IPAR benefited from consumers continuing to purchase fragrances in the third quarter and retailers beginning to stock inventory for the holiday shopping season
- IPAR reported third quarter sales of $368.0 million in line with what the Company had previously disclosed in October
- IPAR has several new product introductions in 2024 and begins to generate sales from Roberto Cavalli and Lacoste brands as well, which should result in IPAR growing sales in 2024
SES AI Corp. – 3Q23 Results
- SES has made significant advancements in engineering and materials, particularly in the cathode, resulting in high stability and improved safety for high Ni cathodes.
- The company has also developed new technologies for pouch cell engineering, electrolyte, lithium metal anode protection, and charging protocols, reducing the risks associated with thermal runaway in both Li-Metal and Li-ion batteries.
- Despite the challenges and the trade-off between energy density and safety in the battery industry, SES aims to improve safety without compromising other parameters, opting for a high-energy density approach and overcoming difficulties to achieve its goal.
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